SMEs hit with record number of fines for auto-enrolment non-compliance
Posted on in Business News , Cycles News
The number of fines imposed on firms that failed to comply with pension auto-enrolment rules increased by almost a third over the last year, while enforcement actions more than quadrupled, thanks to a surge in tip offs to regulators by whistleblowers.
The regulator received 2,545 tip-offs about rules breaches in the 2015/16 tax year, up 29% on the previous year, according to figures obtained by law firm Clyde & Co.
Enforcement actions against employers rose to 8,812, up from 1,947 the previous year, with non-compliant firms facing fines of up to £10,000 per day.
Auto-enrolment requirements came into force for the UKs largest employers in 2012. Since then, this has gradually been extended to smaller employers, in a staging process due to be completed by February 2018.
Clyde & Co. head of pensions Mark Howard said non-compliance issues are likely to get worse over the next two years as more small businesses reach their staging date. "SMEs yet to face their enrolment deadlines are not going to have the support of HR departments to help them deal with the administrative headache of enrolling their employees into a pension scheme," he said.
"The regulator has put out a lot of guidance aimed at SMEs, but even so, it's not surprising we are seeing the number of whistleblowing and enforcement actions increase as the number of employers subject to auto-enrolment grows substantially."
Non-compliant employers have already been hit with a record number of fines during the first quarter.
Nigel Sycamore, director at auto-enrolment specialist adviser Clear Workplace, said many smaller businesses have not yet accepted the new requirements. "We still find at the smaller business end there are some employers who can't believe that this applies to them as it does to the likes of Virgin and Marks & Spencer."
He said in smaller businesses where management is stretched, auto-enrolment often "falls between the cracks".
"The Pensions Regulator will do everything it can to help people comply. But in the end this is about people's right to a pension, so if businesses refuse to comply, they need to be fined."
Get the support you need
If you're looking for guidance on your auto-enrolment responsibilities, ActSmart can help.
ActSmart have made arrangements to introduce you to Elliott Sanders of Copthorne Hundred Wealth Management, a Partner Practice of St. James's Place Wealth Management.
St. James's Place Wealth Management are one of the leading wealth management organisations in the UK with a national network of advisers. Using their experience, they offer businesses and individuals a wealth management service, incorporating pension advice. The advice is face-to-face and tailored to your business or personal objectives.
- Complimentary initial consultation
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Phone Elliott Sanders's team on 
01372 721 616, email Elliott.Sanders@sjpp.co.uk or complete the enquiry form here.
