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Reply to: Auto enrollment pension
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Previously on "Auto enrollment pension"
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You have to auto enrol an employee before they can opt out, and then repeat this every 3 years. Best avoided if you can. I have a couple of employees and I'm enrolling them come march the first. They have both indicated they will be opting out, then I'll have to set a reminder for 3 years hence to go through the process again. It's a pain.
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Absolutely! Am well aware of both dividends and MVL. Got those bases covered already, she's already a shareholder and Company Secretary = office holder for the purposes of MVL.
Thanks for pointing them out all the same though
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Why would you need to be a director to receive dividends?
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Originally posted by Lewis View PostBut yes, am thinking her being a Director makes most sense all things considered, not just for auto enrollment but for the business in general.
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Due to the changes in the Dividend rules you might find it more tax efficient to have her as a Director and pay via Dividends.
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Originally posted by northernladuk View PostShe does work for you and she expects to get paid for it. Surely you have an implied contract which is a contract?
The company won’t have any automatic enrolment duties if only one of you has an employment contract, or neither of you has.
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Originally posted by Lewis View PostAs I don't have an employment contract is doesn't matter if she does or doesn't.
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NEST's charges:
an annual management charge (AMC) of 0.3 per cent on the total value of a member’s fund each year
a contribution charge of 1.8 per cent on each new contribution into a member’s retirement pot
I can see who's going to be the winner of this government initiative!
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Originally posted by TheFaQQer View PostAIUI, even if she were to waive her rights, you still have to have a pension plan in place because she could change her mind. I'd also think that you can't get round it by making her a director - if she is working for you now, then there must be an employment contract in place, and the question the pensions regulator asks (or certainly used to ask!) is to confirm that there are only directors with no employment contracts.
If you need one, you'll probably be better off using NEST (NEST home | UK workplace pension scheme | NEST Pensions) as that looks a lot cheaper than £1500 to set up. My IFA told me that NEST would be cheaper than the pension he provides
It says this on the pension regulator's site, under the husband and wife section:
If you are both directors:
The company will have automatic enrolment duties for both of you if both of you have employment contracts.
The company won’t have any automatic enrolment duties if only one of you has an employment contract, or neither of you has.
As I don't have an employment contract is doesn't matter if she does or doesn't.
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AIUI, even if she were to waive her rights, you still have to have a pension plan in place because she could change her mind. I'd also think that you can't get round it by making her a director - if she is working for you now, then there must be an employment contract in place, and the question the pensions regulator asks (or certainly used to ask!) is to confirm that there are only directors with no employment contracts.
If you need one, you'll probably be better off using NEST (NEST home | UK workplace pension scheme | NEST Pensions) as that looks a lot cheaper than £1500 to set up. My IFA told me that NEST would be cheaper than the pension he provides
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Auto enrollment pension
My wife and I both work full time for our Ltd company (which is a mixture of traditional contracting and a web based product) and we both have Hargreaves Landsdown SIPPs. Because I am the only Director, the company has an obligation to auto-enroll her. HL say their SIPPs are not compliant, but they could setup a compliant group policy for a £1,500 charge.
We have two options as I see it (a) she becomes a Director, or (b) we find a compliant pension and switch her over to that.
What are other people doing? Has anyone found a good compliant pension? Can she choose to waive her auto-enrollment rights? We're tempted to do (a).Tags: None
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