5 February 2016    |    Taxation

Auto Enrolment penalties surge

The number of businesses fined for not complying with auto enrolment pension rules surged between October and the end of December last year.

The Pensions Regulator (TPR) said that it made 1,021 £400 fixed-penalty notices between 1 October and 31 December on employers that did not automatically put workers into a pension scheme.

In the previous quarter it made 107 fixed-penalty notices.

TPR said that the sharp rise in fines was because the pension rules applied to more employers, in particular smaller employers which are more likely to “leave things until the last minute”.

There was also a big increase in the number of compliance notices sent to employers for not complying with pension rules, warning them that they may be fined.

Half of the 4,818 compliance notices sent so far were sent between October and December, the regulator said.

Around 12,000 small and micro employers became subject to the new legal duties last summer. The majority have put eligible staff into a pension without the regulator having to use its powers although, as expected, a number needed the “additional nudge” of enforcement action, TPR said.

“The latest figures highlight the ongoing success of auto enrolment,” said Ros Altmann, minister for pensions. “It is really encouraging to see that so far, the vast majority of small and micro employers have set up a workplace pension for their staff and are helping them on their way to a more financially secure retirement. From now on, the smallest employers will start to meet their obligations and we must ensure they know what to do and have help if they need it.”

The regulator also said:

If you want to avoid Auto Enrolment penalties, then contact Sue Nicolson to discuss how we can provide a cost effective and efficient payroll service for you and your staff.

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