Pension Auto Enrolment - legal duties come into force
30 September saw the end of the initial phase of staging dates for auto enrolment, any business coming within its scope from 1st October 2017 onwards falls into one of the two categories below. As there will no longer be any delay to the obligations taking effect, if you are thinking about becoming an employer please get in touch with us to discuss how the changes will affect the business.
New Employers from 1st October 2017 with a PAYE Scheme
If you become an employer for the first time on or after 1 October 2017, you will immediately have legal duties for their new member of staff.
These duties apply from the first day the first member of staff started working for you. This is known as their duties start date.
You must comply with their duties straight away.
Duties for new employers from 1st October 2017 without PAYE schemes
If you become a new employer on or after 1 October 2017, you will have duties from the day your new worker began employment.
If your staff earn £113 per week (£490 a month) or below, HMRC may not require you to set up a PAYE scheme.
You do still have certain automatic enrolment duties, however, and must start to complete them as soon as you employ your first member of staff:
• You must write to your staff to tell them how automatic enrolment applies to the employee.
• If your staff then ask in writing to be put into a pension scheme, you must set this up for them but you do not have to pay into the scheme.
When you start paying a member of staff more than £113 per week, they must set up a PAYE scheme with HMRC.
They must also assess their members of staff to work out if they need to be put into a pension scheme that you must also pay into.
After you have set up your PAYE scheme, The Pensions Regulator will write to you and ask you to complete a declaration of compliance, which is where you tell us how they've met their duties, by a specific date.
Note: in all circumstances postponement can still be used to delay this by up to 3 months.