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Auto Enrolment is about to hit its peak with over 500,000 small and micro employer set to stage in 2016. With this high volume of micro employers staging early next year, it is important to know whether or not Auto Enrolment applies to your clients.
If your client has at least one member of staff who is paid via a PAYE scheme, Auto Enrolment duties will apply. The only exeption when Auto Enrolment duties does not apply is when a company or individual are not considered to be an employer.
You won’t have any duties if you meet one of the following criteria:
● you’re a sole director company, with no other staff
● your company has a number of directors, none of whom has an employment contract
● your company has a number of directors, only one of whom has an employment contract
● your company has ceased trading
● your company has gone into liquidation
● your company has been dissolved
Automatic enrolment will apply if more than one director has a contract of employment, be it a written or verbal contract. You can find out more about Automatic Enrolment for Directors here.
What if Auto Enrolment does not apply to my clients?
If your client receives a letter which includes their staging date and you believe that auto enrolment does not apply to them, you or the employer need to notify the Pensions Regulator.
To inform the Pensions Regulator, you must fill out an online form with your client’s PAYE Reference and Letter code. Notify the Pensions Regulator here.
Once you have notified the Pensions Regulator, you will receive a confirmation email and your client will no longer receive any further communications.
Change in Circumstances
Your client’s circumstance will change if a new member of staff is taken on other than a director, or if at least two directors started working for them under contracts of employment.
If this occurs, auto enrolment will now apply to your client and the employer, or you on their behalf, must notify the Pensions Regulator of the change.
However, if you do have auto enrolment duties to perform it will make it easier if you have suitable payroll software in place to automate the AE duties. BrightPay is a payroll solution that is free to employers with up to three employees or the bureau licence has unlimited employees and employers. Why not try our free 60 day trial to find out for yourself ?
Written by Rachel Hynes for BrightPay Payroll and Auto Enrolment Software