Automatic Pension Enrollment

[Jessica@WhiteFieldTax]

Yes they are mass mailing. TPR seemingly doesn't know who the exempt micro entities are - but if it's just you, you can ignore the letter and just email them to say you are exempt although one or two details on that process are unclear.

[Forbes Young]

Tend to agree Graeme, save that we are getting conflicting advice from TPR (left and right hand not talking) about whether companies with two officers otherwise exempt from AE can opt out by email.

In one conversation they've said if there is Dir + Co Sec, both salaried, then although they are exempt from AE they have to register, nominate contact, nominate scheme (presumably NEST) and can then rely on exemption. Another news release from them, the full text of the one I linked above, via CIPP website, suggests the two officer companies can opt out by email, but still have to do a declaration.

We've gone back to them again to try and get definitive guidance. As usual I suspect its cock up rather than conspiracy, and they haven't got consistent guidance on the the myriad of micro entities with staging dates + 12 months off.

Yes - we initially understood that one contractor operations/with spouse or without spouse had to register, nominate contact, nominate scheme (presumably NEST) etc but 2 days ago they told us that our client companies just needed to send an email (containing what I had in my initial post). As I understand it the basis of autoenrolment for our client companies is obligatory only if there is a contract of employment in place (as opposed to being a paid worker).

Graeme Bennett ACMA MBA

[cojak]

Yes they are mass mailing. TPR seemingly doesn't know who the exempt micro entities are - but if it's just you, you can ignore the letter and just email them to say you are exempt although one or two details on that process are unclear.

I'm afraid my accountant says I can't ignore the letter.

Unfortunately you will still need to set up a pension scheme and then opt out of the scheme, this is a Government scheme and has to be done.

And they resent me the link for good measure... http://www.thepensionsregulator.gov....Pemployers2014

[Jessica@WhiteFieldTax]

I'm afraid my accountant says I can't ignore the letter.



And they resent me the link for good measure... Workplace Pensions - Automatic Enrolment | The Pensions Regulator

To be clear I don't think anyone has said you can ignore the letter.

What is known:

~ If the company has only one person on the payroll and they are an officer with out a contract of employment, then the need to register with TPR and nominate a pension scheme is negated. However there is a need to reply to the TPR to advise that the company is exempt under these provisions.

~ If there is one or more people on payroll who are not officers (or exceptionally officers with a contract of employment) then full registration with TPR must be effected, to include nomination of scheme and declaration of compliance.

What isn't clear, and TPR won't confirm:

~ payroll is more than one person, eg 2 or 3, but all are officers and not holding contracts of employment. One interpretation is that an email opt out will suffice as per single officer company. Another is that full registration/nomination/declaration is needed. We - and I expect others - are seeking clarification on this but TPR are being unhelpful. I'm erring towards email opt out as per single person rules.

[Forbes Young]

I'm afraid my accountant says I can't ignore the letter.



And they resent me the link for good measure... Workplace Pensions - Automatic Enrolment | The Pensions Regulator

The following is how I understand things, having looked into it and having talked the provisions of autoenrolment through with my IFA - after he has researched into it and after he has contacted the Pensions Regulator directly for advice:

One person ltd companies are outside the scope of the current legislation and as such do not need to autoenrol. Also, if they have their spouse/partner/son etc also on the payroll and there is no contract of employment in place, they are still outside the scope of autoenrolment.

However: all contractors will still be sent letters sooner or later, so my advice is that you email the Pensions Regulator, telling them the PAYE Reference numbers of the company, explaining that they are a one-person ltd company (and if so, also have their spouse on the company’s payroll) and are therefore outside the scope of autoenrolment. Also add that if the company does employ someone on a contract of employment in the future they will let the Pensions Regulator know. Failure to email will result in chase-up letters/threatening letters being sent out to contractors by the Pensions Regulator. Their Email address is [email protected]

By emailing, like I say, this should stop the regulator writing to you and giving you notice of your staging date (the date which you must have auto enrolment live and running). If you do not advise the regulator you will receive at least 3 letters and then it is possible that a fine could follow for taking no action in the matter and ignoring the letters. The same could also happen if you do have a change of circumstances and do not report it to the regulator.

When emailing the pensions regulator you need to confirm that the sender will be the nominated “person” to deal with auto enrolment should it be required – this will be good so that updates can be sent to the sender.

NB – With regards to age & salary limits mentioned in the legislation, age 22 and salary in excess of £10k would trigger the need for a scheme and I know that most contractors take a salary of under £10k but the contractor company will still have to register a scheme and state that they had no qualifying employees as outlined above.

The legislation is confusing and comprises over 270 pages of A4.

Graeme Bennett ACMA MBA

[TheCyclingProgrammer]

Thanks Graeme, that post was useful. Just to clarify:

One person ltd companies are outside the scope of the current legislation and as such do not need to autoenrol. Also, if they have their spouse/partner/son etc also on the payroll and there is no contract of employment in place, they are still outside the scope of autoenrolment.

I assume this needs to be an explicit, written contract of employment and that they aren't going to turn around and suggest there is some kind of "implied" contract? For example, my wife is company secretary and also does some admin work and receives a small salary for this - presumably that would mean we are out of scope?

I'm still waiting for clarification from my own accountant on this.

[Platypus]

I've decided I'm gonna go with NEST for simplicity. My accountant also told me I have to have a scheme, even if everyone opts out!

[Forbes Young]

Tend to agree Graeme, save that we are getting conflicting advice from TPR (left and right hand not talking) about whether companies with two officers otherwise exempt from AE can opt out by email.

In one conversation they've said if there is Dir + Co Sec, both salaried, then although they are exempt from AE they have to register, nominate contact, nominate scheme (presumably NEST) and can then rely on exemption. Another news release from them, the full text of the one I linked above, via CIPP website, suggests the two officer companies can opt out by email, but still have to do a declaration.

We've gone back to them again to try and get definitive guidance. As usual I suspect its cock up rather than conspiracy, and they haven't got consistent guidance on the the myriad of micro entities with staging dates + 12 months off.

Yes Jessica- it has been a frustrating few months trying to obtain a concrete procedure to adopt. Only one of our clients has received a letter so far - so it will be interesting to see the response to the email sent off.....

Graeme Bennett ACMA MBA

[Forbes Young]

Thanks Graeme, that post was useful. Just to clarify:



I assume this needs to be an explicit, written contract of employment and that they aren't going to turn around and suggest there is some kind of "implied" contract? For example, my wife is company secretary and also does some admin work and receives a small salary for this - presumably that would mean we are out of scope?

I'm still waiting for clarification from my own accountant on this.

Yes I would have thought so - you can have a verbal contract of employment but of course this is difficult to establish! To all intents and purposes a written contract of employment is what I am basing things on. A lot of our clients are set up with the main director/shareholder/worker with their spouse taking a small salary and dividend split. My advice to them is that they are outside the scope of AE as no contracts of employment exist but to email the PR like I say to explain their situation once they receive a letter -we are sending the emails/operating as the nominated contacts on behalf of clients if they prefer - no extra fees! :-.

Graeme Bennett ACMA MBA

[TheCyclingProgrammer]

Yes I would have thought so - you can have a verbal contract of employment but of course this is difficult to establish! To all intents and purposes a written contract of employment is what I am basing things on. A lot of our clients are set up with the main director/shareholder/worker with their spouse taking a small salary and dividend split. My advice to them is that they are outside the scope of AE as no contracts of employment exist but to email the PR like I say to explain their situation once they receive a letter -we are sending the emails/operating as the nominated contacts on behalf of clients if they prefer - no extra fees!

Thanks. I'll wait and see what my accountant says but might send him a link to this thread - I think he was waiting to get tax return season out of the way before doing serious research on the subject.

As I understand it there's still a few years until this kicks in for most of us anyway isn't therE?