Staff pensions rule for all businesses

NEW businesses which launch from October 1 must include staff pension schemes in their start-up costs, even if they are only employing one person, a local tax specialist has warned.

Andrew Geddes, who runs TaxAssist Accountants in Southport, said: “From this October, any business start-up which employs one or more people, must auto-enrol them on a company pension scheme and contribute to their pension pot.

“There is no breathing space for new businesses under the new pension rules, despite the host of other cost considerations they face as they launch their new enterprise.

“They must set up a company pension scheme and contribute a minimum of 1% of each qualifying employee’s salary, matched by the employee’s 1%.

“Those percentages will increase year on year until they reach 3% employer contribution and 5% employee in 2019.

“Between now and February next year, there are also some 700,000 small businesses across the UK who are reaching their staging date for workplace pension schemes and we’re advising many local business owners, who have now received notices from the Pensions Regulator.

“Many have planned well in advance and have fully compliant pension schemes up and running already, but for those employers yet to comply with the new rules, they must act quickly.

“The Pensions Regulator is carrying out spot checks across the country and can impose a £400 fixed penalty, escalating to daily fines set at a minimum of £50 per day for noncompliance.

“Those fines increase to £500 per day if the company has over five employees and can reach a maximum of £10,000 per day if it has 500 or more employees, with the added possibility of civil penalties and court action.”