Pension Auto Enrolment

[TheCyclingProgrammer]

Remember for a spouse to be paid a salary they must be doing work for the company, therefore they are a 'worker'.

Surely a company secretary can be remunerated simply for holding the position and all that entails?

This article here suggests that the husband/wife director/secretary scenario, with the secretary paid a small salary for admin duties would potentially be exempt but I don't know if Jessica has changed her view on that since this rather old post:
https://www.whitefieldtax.co.uk/web/...nt-exemptions/

But anyway, my wife does do work for the company for her very small salary (< £3k) as well as being company secretary so lets assume that means I need to do something about this auto-enrollment bollocks. I'll wait to speak to my accountant, my staging date isn't until July 2017.

[RSoles]

What I'd like to know is do we need to set up a separate company scheme, or is it sufficient for the Company to make payments into,
say, the employee's SIPP?

[jamesbrown]

So if its just yourself as a director and a spouse as a company secretary, both without a contract of employment, then neither are treated as workers for the purposes of auto-enrolment and therefore no opt-out is necessary?

It seems like that should be the case but if your spouse is company secretary *and* receives a salary for doing other work too then it seems they may be treated as a worker.

Lets assume for a minute that a spouse who is also a company secretary and receives a salary *is* within the scope of auto-enrollment, then isn't there also a salary threshold to consider first?

First of all, you must inform the Pensions Regulator about status. There is no scenario in which an opt-out is not necessary, otherwise you'll begin receiving documentation for auto-enrolment.

Second, if the Company Secretary is simply an office holder, with no contract of employment, written or verbal, and hence their work relates only to this office, my reading is that they are not a "worker" for the purposes of auto-enrolment (in the same way a director is not a "worker") and thus any requirement on the company for auto-enrolment will depend on whether it has other qualifying "workers".

However, I am reading this detailed guidance from the same starting point as most others here (i.e. as a contractor, not a specialist adviser), so I'd invite any accountant or other adviser commenting on this thread to qualify their answers with respect to the information provided in the detailed guidance, posted above. Office holders are addressed on p11 of the guidance. Note that directors and office holders do not, strictly speaking, receive a salary, but they may receive a fee for their work in that office. Of course, item 37 is also important in this respect, i.e. an office holder can be a "worker" for the purposes of auto-enrolment, depending on the facts.

[jamesbrown]

Even if the spouse is paid under the £10k limited, there still needs to be a qualifying pension scheme open because they would be entitled to join if they wanted.

Remember for a spouse to be paid a salary they must be doing work for the company, therefore they are a 'worker'.

Lastly the contract of employment doesn't have to be written, it can verbal.

I disagree (but I'm also happy to be shown as wrong ). Please reference your answer with regards to the specifics of the detailed guidance posted. I think you're potentially confusing "salary" with "fee" and I don't believe you're adopting a sufficiently precise definition of "worker", namely the one adopted by The Pensions Regulator in the detailed guidance.

[TheCyclingProgrammer]

My wife is company secretary. She also receives a small salary. She also has duties relating to company admin, managing of the payroll, dealing with my expenses etc.

On that basis, it seems like it could be argued that the salary she receives might be partly for her being company secretary but also partly for her other duties which could therefore make her a "worker".

She has no formal contract of employment however when she was made company secretary, board minutes were raised outlining the fact that she was to be made company secretary, what her duties were and that she would receive a small salary for this.

It seems like this could be taken for a form of contract so it seems like I'll need to err on the side of caution on this one.

To be honest, family businesses should be able to opt out of this altogether. Like I said, load of bollocks.

[Chris at CrunchAccounting]

Auto enrolment

As this is brand new, the rules have not been interpreted - so when I spoke to the regulator they couldn't give me an answer and just referred me to their guidance (not overly helpful!).

When I asked the questions about 'fees' or 'salaries' they said the generic line of:

"The only exemption is for companies with only one director. In this situation, there are no ‘workers’ to enrol, so you don’t have to worry. Your spouse can also hold the position of company secretary/director without you having to enrol him or her automatically, if:

They don't work under a contract of employment (as an employee), or
They don't have a contract to perform work or services personally and are undertaking the work as part of their own business"

Hopefully over time the guidance will be clearer for SMEs, for whom the rules were not designed for.

[jamesbrown]

As this is brand new, the rules have not been interpreted - so when I spoke to the regulator they couldn't give me an answer and just referred me to their guidance (not overly helpful!).

When I asked the questions about 'fees' or 'salaries' they said the generic line of:

"The only exemption is for companies with only one director. In this situation, there are no ‘workers’ to enrol, so you don’t have to worry. Your spouse can also hold the position of company secretary/director without you having to enrol him or her automatically, if:

They don't work under a contract of employment (as an employee), or
They don't have a contract to perform work or services personally and are undertaking the work as part of their own business"

Hopefully over time the guidance will be clearer for SMEs, for whom the rules were not designed for.

OK, but I think that's consistent with the detailed guidance, rather than your earlier post, which seemed to imply that a Company Secretary would, by default, qualify as a "worker". But perhaps you weren't trying to imply that.

The only thing I'm unclear about in your list is what you mean by "undertaking the work as part of their own business" in the context of a Company Secretary. Do you mean if the Company Secretary is contributing to the revenue of the business in a self-employed capacity, i.e. is working under a contract for services (as opposed to contract of service) in addition to their role as Company Secretary? In that case, I agree.

[jamesbrown]

My wife is company secretary. She also receives a small salary. She also has duties relating to company admin, managing of the payroll, dealing with my expenses etc.

On that basis, it seems like it could be argued that the salary she receives might be partly for her being company secretary but also partly for her other duties which could therefore make her a "worker".

She has no formal contract of employment however when she was made company secretary, board minutes were raised outlining the fact that she was to be made company secretary, what her duties were and that she would receive a small salary for this.

It seems like this could be taken for a form of contract so it seems like I'll need to err on the side of caution on this one.

To be honest, family businesses should be able to opt out of this altogether. Like I said, load of bollocks.

Nah, if you ask me, she isn't a "worker" for the purposes of auto-enrolment. She's doing duties related to the office, not earning revenue under a contract of service. But that's just my opinion.

[jamesbrown]

By the way, I agree that it's all a bit silly in a micro-business scenario, because a qualifying "worker" can subsequently decide themselves to opt out. It's really just to avoid larger employers from evading their responsibilities, rather than to trap micro-businesses in red tape (sounds familiar).

[Platypus]

To be honest, family businesses should be able to opt out of this altogether. Like I said, load of bollocks.

Hopefully over time the guidance will be clearer for SMEs, for whom the rules were not designed for.

By the way, I agree that it's all a bit silly in a micro-business scenario, because a qualifying "worker" can subsequently decide themselves to opt out. It's really just to avoid larger employers from evading their responsibilities, rather than to trap micro-businesses in red tape (sounds familiar).

This is a PITA. I enrolled myself today (that being the company's staging date). The website is a doddle to use although understanding all the processes and set up isn't easy. I might well opt out next month