A declaration of compliance needs to be completed and submitted to the Pensions Regulator within five months of the staging date. A Declaration of Compliance is the employer informing The Pension Regulator that they have met their automatic enrolment duties. For example, if the staging date is 1 July 2016, you must submit your declaration of compliance to the pension regulator no later than 31 November 2016. This deadline can be also called your registration deadline. If your registration deadline falls on a Saturday, Sunday or public holiday, you can provide your registration on the next working day. If you’ve postponed automatic enrolment for any of your staff, you mustn’t submit your registration until after the postponement period has ended.
If you do not submit your declaration of compliance in time you may be fined. It is a legal duty that the declaration of compliance is fully completed with the correct information and submitted on time.
Should you be experiencing any issues regarding your automatic enrolment process or collecting the relevant information for your Declaration of Compliance contact The Pension Regulator immediately. The Pension Regulator's website has a help section: http://www.thepensionsregulator.gov.uk/automatic-enrolment-registration-questions.aspx.
An employer who wanted to bring their staging date forward had previously to give The Pensions Regulator (TPR) notice of one month. Employers are no longer required to give The Pensions Regulator one month's notice. If an employer wants to bring forward their staging date now they will still have to notify the Pensions Regulator but only will have to do so at any time on or before their new staging date.
But employers who do have employees for automatic enrolment need to agree the date with the Pensions Regulator and like all staging dates it has to be the 1st day of the month. Employers with no employees for automatic enrolment can bring forward their staging date to a date of their choice and also complete their declaration of compliance at the same time thus fulfilling their automatic enrolment duties as an employer. The requirement for employers with no employees for automatic enrolment to set up a pension scheme is no longer required. They only need to do this once they have an employee for automatic enrolment purposes.
Our very own Paul Byrne was recently interviewed by Richard Hattersley at Accountex about automating the process of auto enrolment. We understand by automating automatic enrolment, businesses can increase efficiency and streamline an otherwise labour intensive process. Watch this video to understand how your business can process automatic enrolment more productively.
BrightPay can not only facilitate auto enrolment but the software has the power to tell you when you need to enrol your employees and when to send the auto enrolment letters. Once the staging date is entered, BrightPay knows to complete the employee assessment. BrightPay will then tell you which worker category each employee falls into.
From there, BrightPay will automatically create the relevant letter for each employee. These letters are personalised with employee details and are customised to suit each employees worker category. It is possible to email, print or export all of these letters for all employees in minutes.
With BrightPay automatic enrolment is easy. Book a free online demo of BrightPay today. We also offer a 60 day free trial which includes full functionality of all features. Don’t worry we won’t ask you for any credit card details. If you are an employer with three or less employees, BrightPay is completely free. You can download your free licence here.
Click here to find out about BrightPay's auto enrolment features.
HMRC claims it is offering its best customer service in years presently. This is a reaction from a report that the National Audit Office published in May 2016 stating that the quality of customer service HMRC provides has deteriorated over an 18 month period in 2014 and 2015. In this period some people calling HMRC were waiting up to an hour, treble the average call waiting time, costing taxpayers the equivalent of £97 million last year.
HMRC says it has achieved improvements to customer service by:
• recruiting more than 3,000 additional advisers who can work outside normal office hours;
• introducing more flexible working to deal with large fluctuations in customer demand throughout the year, underpinned by a new telephone system that enables HMRC to move calls around the country in response to demand;
• launching online services that enable customers to manage their tax affairs when and where they want, including by smartphone, with online support such as webchats.
HMRC have also indicated that they may make the following changes that were in Chancellor George Osborne’s 2016 budget, including:
• the introduction of a seven-day service by April 2017, with extended hours and Sunday opening on main phone lines, as well as online support services such as webchats;
• the recruitment of more than 800 new staff into the customer services teams, to reduce call answering times and further increase the flexibility to respond to demand;
• a new secure email service – operated through customers’ online tax accounts.
Ruth Owen, HMRC’s director general for customer services, said: “Over the past six months we’ve consistently answered calls in an average of six minutes, and have launched new online tax accounts and webchat for everyone, enabling customers to manage their tax affairs wherever and whenever they want. There’s never been a better or more convenient service for our customers.”
Research conducted by CIPP has shown that HMRC's response times in recent months have improved.
Every quarter UK Visas and Immigration and Immigration Enforcement publish a report showing the number of fines issued to employers in each region of the UK for employing illegal employees. Over £21 million fines were issued in the second half of 2015. The total amount of illegal employees in that same period was 1,820, the area with the most illegal employees was in the London and South East region.
Employers can face fines and criminal prosecution for hiring illegal employees, the maximum fine having increased from £10,000 to £20,000 in May 2014 for illegally hiring an immigrant. Employers are advised to ensure they know what the correct work checks are and ensure these checks are being made.
On GOV.UK the UK Visas and Immigration and Immigration Enforcement have An employer’s guide to right to work checks which details:
• what a right to work check is
• why you need to do right to work checks
• whose documents you should check
• how to carry out checks
• when to carry out initial checks, follow-up checks and what happens under TUPE what documents are acceptable.
Employers MUST enrol all eligible jobholders into a qualifying AE pension scheme, even if they know or think that all employees are going to choose to opt out. Employees need to have the ability to exercise their right to opt out. Employers must also arrange active membership for non-eligible jobholders and entitled workers if they exercise their right to opt in or join the pension scheme.
Opting-out is when a jobholder decides to leave the pension scheme that has been set up by the employer within a set opt-out period. The employee needs to decide within a month of becoming an active member of the pension scheme if they want to opt out. Employers must not try to persuade or encourage their employees to leave or opt out of the pension scheme. This is considered to be an inducement.
Opting out for the employee:
Jobholders can only opt out of a scheme once they have become an active member and have been given the required auto enrolment communications by their employer. Opting-out can only happen within a specific time period, known as the ‘opt-out period’. If a jobholder decides they wish to opt out, their employer must receive an ‘opt-out notice’ for the employee, which is normally provided by the pension scheme. Entitled workers who decided to exercise their right to join the pension scheme are not entitled to opt out but they do have the right to cease active membership.
There is a fear that some employees may feel pressurised into opting out of the scheme.The decision to opt out must be taken freely and without any persuasion from the employer. An opt-out notice must not be submitted until the jobholder has become an active member of a scheme. If the employee subsequently changes their mind and wishes to opt back into a scheme, they need to write to their employer informing them of this decision. If the employee decides to remain out of the scheme, the employer will automatically re-enrol them back into the pension scheme in three years time should they meet the necessary criteria. The employer must also keep records of any employee opt-outs to assist with this.
Opting out for the employer:
The employer must take action once they receive an opt-out notice for a jobholder. Employers need to check that they receive a valid opt-out notice and that it is within the relevant ‘opt-out period’. Once the employer has received a valid opt-out notice, they must stop deducting contributions immediately. The jobholder needs to be treated as if they have never been a member of the pension scheme and should be refunded any contributions that have already been deducted to date.
Employers must not accept an invalid opt-out notice, for example if the jobholder is outside of the opt-out notice period. If the employer receives an opt-out notice after the opt-out period, they must instead cease active membership for that jobholder. Jobholders who leave an occupational pension scheme after the opt-out period has ended, may also be entitled to a refund of contributions. This will depend on when their pensionable service started and the pension scheme’s own rules. The employer must also communicate and explain to the employee why it is invalid.
Employees who are pressurised into opting out are asked to inform The Pensions Regulator.
Remember all employers need to complete a Declaration of Compliance which will inform The Pensions Regulator how they have complied with their automatic enrolment duties.
For the new tax year 2016-17 HMRC have introduced a new exemption that removes the liability of income tax for certain low valued Benefits in Kind ('Trivial BiKs')
Currently this is subject to Parliamentary approval and will be part of the new legislation Finance Bill 2016. Draft guidance on the new exemption has been published on GOV.UK and will be included in HMRC's Employment Income Manual later in the tax year. Previous treatment of Trivial BiKs was that employers could agree with HMRC that particular BiKs could be treated as trivial and did not need to be returned to HMRC at the end of the tax year and this no longer applies.
General conditions that a 'trivial BiK' must meet in order to qualify are:
• A. the BiK must not be cash or a cash-voucher
• B. the BiK must cost £50 or less
• C. the BiK must not be provided as part of a salary sacrifice or other contractual agreement
• D. the BiK must not be provided in recognition of services performed by the employee as part of their employment, or in anticipation of such services
In a tax year for an employee there is no limit on the amount of BiKs that can be provided where all the conditions are met, unless Condition E applies (see below)
Condition E applies an annual £300 cap where a trivial BiK (that meets conditions A to D) is provided by an employer that is a close company to an employee that is:
• a director or other office-holder in the company member of the family or household of a director or office-holder of the close company
HMRC has provided a soft landing for late filing penalties for full payment submissions (FPS) under RTI since 2014/15, but that was due to end on 5 April 2016. Now, seven weeks into the 2016/17 tax year, HMRC has announced that the late filing penalty soft landing will be extended to April 2017. The fully automatic late filing penalty regime for RTI was supposed to come into force from 6th October 2014 for employers with 50 or more employees, and from 6th March 2015 for all other employers. In fact, the automatic function was disconnected, and HMRC decided to risk assess the issue of all RTI late filing penalties.
HMRC will continue with this risk-based approach until at least 5th April 2017. This means that only employers who have persistently filed their FPS late for several months will be issued with a penalty – which can be appealed.
For company cars HMRC has issued details regarding the latest Advisory Fuel Rates. From the date of change employers may use the old rates or new rates for one month. Employers are under no obligation to make supplementary payments to reflect the new rates but can do so if they wish. Hybrid cars are treated as either petrol or diesel cars for this purpose for the fuel rates.
During the 2016-17 tax year, HMRC has decided to continue their approach of the 3 day easement and the risk-based approach to charging penalties. Employers will not incur penalties for delays up to three days in filing PAYE information to HMRC. This is due to a review of this approach that was implemented in the 2015-16 tax year which showed a large reduction in returns being filed late.
Employers are required to file their PAYE information to HMRC on or before each payment date, which is the statutory filing date, unless the circumstances set out in the 'sending an FPS after payday guidance' are met. The three day easement is not an extension to the statutory filing date. No late filing penalties will be charged for late filing up to three days after the statutory filing date. However, employers who consistently are filing their returns for up to the three days after the statutory filing date will be monitored by HMRC and may be issued with a penalty.
HMRC will continue to monitor the situation and will review their approach if necessary for the tax year 2017-18, focusing on employers who are constantly filing late and failing to meet the statutory deadlines.