Pensions And Auto Enrolment

Pensions And Auto Enrolment Services

Our comprehensive Auto Enrolment Service covers everything from initial planning to implementation and ongoing maintenance, providing you with a hassle-free solution that saves you valuable administrative time. Benefit from our fully compliant automatic enrolment system!

Our auto-enrolment service

When purchasing goods or services, Value Added Tax (VAT) is a mandatory tax that must be paid. If you operate a business, you might have an obligation to register for and collect VAT.

Companies that generate a turnover of over £85,000 (which is known as the VAT registration threshold) are required to register for VAT, charge VAT on the goods and services they sell, and pay this amount to HMRC when filing their quarterly return.

What does Auto-Enrolment entail and who is eligible for it?

Due to concerns over insufficient retirement savings among the UK workforce, the government introduced the automatic pension enrolment scheme in 2012. This scheme made it mandatory for employers to enroll eligible workers into a workplace pension plan.

To find the annual thresholds for the 2021-2022 tax year, you can visit the DWP website.

All businesses in the United Kingdom are now required to establish pension plans for employees who meet specific criteria, including contributions from both employers and employees. To be eligible, individuals must:

  • Be at least 22 years old
  • Be below the state pension age
  • Earn more than £10,000 per year in 2020/21
  • Work in the UK

Contributing to workplace pensions is a joint responsibility shared by both employers and employees, with the government providing tax relief.

If you own a business with one or more employees, it is essential to comply with the Act. You will need to:

  • Establish a workplace pension scheme that meets the new regulations
  • Automatically enroll all eligible workers
  • Make contributions to the retirement pots (pensions) of eligible workers
  • Enroll other workers upon their request to join the scheme

If you have already begun your pension staging duties, we can provide you with a comprehensive auto-enrolment solution. We can assist you in successfully implementing the scheme, ensuring ongoing compliance for your business, and connecting you with recommended financial adviser partners.

How can one ascertain the criteria for auto-enrolment eligibility?

Members who meet the eligibility criteria are required to be part of a qualifying scheme or be automatically enrolled into an auto-enrolment scheme.

For non-eligible jobholders, the option to voluntarily join the scheme should be offered.

Entitled workers must be provided access to a pension scheme.

Once we have assisted in identifying your eligible or entitled employees, we will oversee the following:

  • Gather essential employee information
  • Assess your Payroll and HR Processes
  • Review employee contracts for any legal considerations
  • Identify and designate key points of contact

Additionally, we will collaborate with you to ensure a comprehensive understanding of your responsibilities as an employer and the responsibilities of your employees to optimize retirement income.

Flat Rate VAT Scheme

Employer duties/impact Employee duties/impact
Legally required to notify each staff member individually about their auto-enrolment status.
The option to choose whether to opt-in or opt-out is available.
You are obligated to contribute a minimum percentage of your "qualifying earnings" into your workplace pension scheme.
It is mandatory to contribute a minimum percentage of your "qualifying earnings" towards your workplace pension scheme.
Profit reduction occurs as a result of the contributions made.
Enrolling in a workplace pension scheme leads to a decrease in your take-home income.
Deductible expense, no NIC payments, and increased employee benefit.
You are eligible for tax credits or a potential increase in the amount of tax credits you receive.
Every three years, you must provide information to the pensions regulator regarding your compliance with auto enrolment obligations.
Entitled to income-related benefit or increased amount of benefit.
Submit employee data for contribution payments to the Pension Regulator every pay period.
Lower the required amount of student loan repayments you must make.
Continuously monitor the ages and earnings of employees to determine if any individuals need to be enrolled automatically.

Minimum & Maximum Contribution Levels

The contribution amounts for you and your staff members in the pension scheme may differ based on the chosen scheme. However, according to the law, both you and your staff are required to make a minimum contribution. Starting from April 2019, the minimum contribution increased to 8% of qualifying earnings, with the employer responsible for 3% and the employee responsible for a minimum of 5%.

Exemptions From Auto Enrolment

The obligations of automatic enrolment do not apply in situations where a company or individual is not classified as an employer or if any of the following criteria are met:

  • You are a sole director company without any additional staff.
  • Your company consists of multiple directors, none of whom hold employment contracts, and there are no other staff members.
  • Your company consists of multiple directors, with only one director having an employment contract, and there are no other staff members.
  • Your company has ceased trading.
  • Your company has been dissolved.
  • You no longer employ individuals in your home, such as cleaners, nannies, personal care assistants, etc.

Looking for a complete retirement planning service for your business?

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If you meet the criteria for automatic enrolment, your employer will enroll you into a pension scheme and make contributions towards your pension. In cases where your employer is not legally required to enroll you, you still have the option to join their pension scheme voluntarily if you wish to do so.

Yes, you can leave (often referred to as ‘opting out’) if you want to. If you do opt out within a month of your employer adding you to the scheme, you’ll get back any money you’ve already paid in. You may not be able to get your payments refunded if you opt out later – they’ll usually stay in your pension until you retire.

In the event that no funds are withdrawn from your pension upon your death, your beneficiaries typically have the option to receive the money as a lump sum and establish an annuity. Additionally, they may have the opportunity to arrange a flexible retirement income through pension drawdown.

If you are already a member of a workplace pension scheme that meets specific minimum standards (referred to as a ‘qualifying scheme’), automatic enrolment will not have an impact on you. However, if the contribution levels of the scheme drop below the minimum requirements for an automatic enrolment scheme, you and/or your employer may need to commence or increase contributions.

In the case of individuals with multiple jobs, each job is considered independently for automatic enrolment. If desired, you can opt out of specific schemes. Each of your employers will assess your eligibility to participate in their pension scheme. If deemed eligible, you will be automatically enrolled in the respective workplace pension scheme of each employer.

Self-employed individuals do not undergo automatic enrolment into a pension scheme. Consequently, it is prudent for you to proactively plan for your retirement and initiate contributions to a pension plan.

Starting from April 2019, the minimum contributions for a qualifying pension scheme increased to 8% based on a specific earnings band. As of now, there are no scheduled increases planned for April 2022 (with the lower limit qualifying earnings band at £6,240 and the upper limit at £50,270). Therefore, any changes in the estimated contribution costs this year, compared to the previous year, will be influenced by the growth of your earnings.