Reply to: Automatic Pension Enrollment

[SteelyDan]

On this subject in general, I know individual circumstances will differ, but when I spoke to my a/cs, I was initially thinking of ways to avoid this.

But then I was asked by my a/cs to actually consider doing it as I could pay say 10% of wife's salary into it, as an employer contribution/month, and wife didn't need to make any contributions at all. So I could still pay her a salary, and put into this scheme for her which would build up over time. Couldn't see what the problem was with that at all as it seems tax efficient.

They did say however that the NEST scheme was cr*p but they did have an alternative suggestion.

[Jessica@WhiteFieldTax]

Interesting question, and not one thats come up in practice.

Thinking it through, a salary sacrifice without a contract of employment would be a bit of a nonsense. But theres no need for a controlling officer to do a salary sacrifice - just make the payment for child care within the exempted limits. I'm not aware of anything saying you can only have the exemptions if there is a contract. In fact, away from salary sacrifice, I'm not aware of any difference in the Tax Legislation between people with and without a contract of employment.

I wouldn't worry about it.

[Lumiere]

If I say in that email to TPR that "The only people working for the company are directors and none of them has an employment contract. ", wouldn't it contradict with one of the conditions for paying childcare fees directly from the company account ? I think there was something about having a contract of employment ...

[Jessica@WhiteFieldTax]

We now have something definitive from TPR on the multi director/no contract issue:

No staff to automatically enrol? | The Pensions Regulator | The Pensions Regulator

which is a sub page of

Your step-by-step guide to automatic enrolment | The Pensions Regulator

If you don’t have any staff other than directors, you may not have any automatic enrolment duties. You won’t have any duties if the only people working for you are:

you as the sole director, or
a number of directors, none of whom has an employment contract, or
a number of directors, only one of whom has an employment contract

Automatic enrolment will apply if more than one director has a contract of employment.

You can find more information about employment contracts on the employment status section of the GOV.UK website. You can find more information about your duties if you're a director in automatic enrolment enquiries.

What do you need to do?

If you receive a letter which includes your staging date and you believe that automatic enrolment duties don’t apply to you, please email [email protected] and complete the details in the pre-populated message that opens when you select our email address. You’ll need your letter code icon question mark, PAYE reference icon question mark and Companies House number icon question mark (if you have one) to hand.

I don't think there is a any practical difference between directors and secretaries in this instance, the key thing being they are office holders rather than staff.

So the multi opt out for officers (plural) w/o contracts seems confirmed.

[Jessica@WhiteFieldTax]

Thinking about it. I already have a pension with Aviva that's crap and I've done nothing with it (I know I should have done, but I didn't).

Do I have to stop that one in order to go with NEST? (I couldn't see the answer on the website).

No, you don't

[cojak]

Thinking about it. I already have a pension with Aviva that's crap and I've done nothing with it (I know I should have done, but I didn't).

Do I have to stop that one in order to go with NEST? (I couldn't see the answer on the website).

[cojak]

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!

I've had a look and I think I'll do the same Platypus.

[Jessica@WhiteFieldTax]

I think all will become a lot clearer once our clients receive replies to the emails sent to the PR based on what our advice is (which Ive given in a previous post). Im still awaiting one or two of the first clients who have been approached to let me know what they receive back from the PR.

Graeme Bennett ACMA MBA

Yep, stance I'm going to get my team to take once we get into it. Send multi opt outs in and wait for rejections. A bit farcical though, TPR ought to have seen this coming. How many companies will it apply to? Probably 30% or more on register.

[Forbes Young]

I would expect so as well, but the letter is unsatisfactory - 1a is singular, 1b and 1c are plural.

I just wish we had some intelligent communication from TPR. Grr

I think all will become a lot clearer once our clients receive replies to the emails sent to the PR based on what our advice is (which Ive given in a previous post). Im still awaiting one or two of the first clients who have been approached to let me know what they receive back from the PR.

Graeme Bennett ACMA MBA

[jjdarg]

FWIW, (and not sure if it contributes to this discussion necessarily)

I asked Hargreaves Lansdowne about my Vantage SIPP potentially qualifying for the auto enrolment. They said that for right now, the SIPP can be used for employer contributions (distinct from auto enrolment, of course) and I filled out a bit of paperwork to make it legit.

But they are awaiting further guidance (in April, I believe) from TPR as to whether the Vantage SIPP would qualify for auto enrolment purposes - so it looks like there are some aspects of auto enrolment that are still up in the air.

[Jessica@WhiteFieldTax]

I would expect so - the key thing is that there is no contract of employment.

I would expect so as well, but the letter is unsatisfactory - 1a is singular, 1b and 1c are plural.

I just wish we had some intelligent communication from TPR. Grr

[TheFaQQer]

That letter above only mentions directors - what about company secretaries? Should be the same position shouldn't it?

I would expect so - the key thing is that there is no contract of employment.

[TheCyclingProgrammer]

That letter above only mentions directors - what about company secretaries? Should be the same position shouldn't it?

[Platypus]

The staging dates should be 2016 and 2017 for our clients

My staging date is June 2015

Finished my NEST enrolment today. Now need to send a letter to myself explaining it all

[VelcroPower]

Got this from TPR today - hopefully will be of use;

To confirm to The Pensions Regulator that there are only directors in the company, none of whom are workers for the purposes of automatic enrolment please send an email to [email protected] stating the following:

1. I confirm that [company name] is a not an employer for the purposes of automatic enrolment for the following reason – (select one option from the list below):
a) there is only one director and there are no other staff working for the company
b) the only people working for the company are directors and none of them has an employment contract
c) the only people working for the company are directors and only one of them has an employment contract
d) the company has ceased trading (including date ceased)
e) (if there is some other reason why you believe you do not have any automatic enrolment duties, please provide a brief explanation)

2. The letter code for the company is: [The letter code is a 10 digit number which can be found on all letters sent from The Pensions Regulator]
3. The PAYE scheme(s) reference is:
4. The companies house number (where applicable):
5. The name, email address, address and telephone number of contact at the company.
If the company’s circumstances change so that there are at least two people working for the company under contracts of employment (whether directors or other staff) then you will need to inform us of this as soon as possible.