Time running out for small firms to meet pension auto-enrolment deadlines

Federation of Small Businesses

Pension auto-enrolment deadlines are looming for thousands of small firms across the region, with hefty fines likely for those who miss compliance deadlines, the Federation of Small Businesses has warned.

Now that most large and medium sized businesses have migrated to the mandatory government scheme, which forces all employers to provide a pension for staff, it will be the turn of firms employing fewer than 50 staff next to be drafted in to the scheme from June next year. However, due to the complex nature of the new regulations it takes a minimum of around six months for businesses to be set up and be issued with PAE compliance certificate.

“This means that small firms have to act now, the time for dithering is over,” said FSB Regional Chairman for Manchester and North Cheshire, Richard Gregg.

“Effectively, businesses that haven’t started the process by December could well be hit with a fine come June, which can be as much as £500 for everyday of non-compliance. It’s looking highly likely that there is going to be a capacity crunch at some point between now and 2017, and the best way to avoid getting caught out is to act now.

“Well over a million businesses will have a staging date between 2016 and 2018. This tsunami could well cause havoc for those who have not prepared, so our advice is simply don’t wait, this is not something that’s going away.”

By March next year the first 100,000 UK businesses with fewer than 30 staff will be given their staging date – the deadline they must be compliant by. The rest will follow over the succeeding three years.

Added Gregg: “For most small firms, being told to go away and set up a pension scheme will sound a daunting and onerous task. They’ll just want someone to take the headache away, and not pay too much for it. The good news is that there are specialists out there who can help, including the FSB. So the message is don’t panic, but don’t do nothing either.”

Any business seeking further information about the implications of PAE can contact the FSB business helpline on: 0808 100 1613.