When do Auto-Enrolment Pensions not apply?
Although the majority of employers will now be in the swing of auto-enrolment pensions, in certain circumstances they are not required. Although we do occasionally find a payroll which should have a pension in place but doesn’t, the following are examples where auto-enrolment pension do not apply:
- Tronc payrolls (no pay subject to NI)
- Where there is a single director and no employees
- A company that has ceased trading with no employees
Directors of a company with employees can also sometimes be exempt from auto-enrolment duties if they are not considered to be an employee themselves. A director without an employment contract is not considered to be an employee, so does not need to be assessed for auto-enrolment. You can find more details here.
Notifying The Pensions Regulator
Even if you do not need to provide auto-enrolment pensions you still need to notify The Pensions Regulator that you are not considered an employer. This declaration means The Pensions Regulator will not consider you an employer, but you need to take due care and consideration when making it.
If circumstances change, such as a new employee starting that is not a director, then you should contact The Pensions Regulator to inform them. Your duties will start with your first employee, even if they are not eligible to join the scheme.
From 1st October 2017 all new business with employees had their duties start from the first day of employing staff, before this the business would receive a ‘staging date’. The staging date was allocated by The Pensions Regulator, and was when an employer had to start assessing and offering their staff a pension. All staging dates have now passed, the last being February 2018, so all employers will now be affected by pensions.
New employers can check their duties with The Pensions Regulator here. A new employer’s duties start with their first employee.