Auto Enrolment

Make sure your mandatory business pension auto enrolment obligations are always met with the help of our specialist chartered accountants.

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What is auto enrolment?

All UK businesses are legally required to operate an automatic enrolment pension scheme for eligible employees, made up of both employer and employee contributions. Company directors without employment contracts are usually exempt from auto-enrolment. Businesses that don’t have any employees also don’t have to comply with auto enrolment.  

Employers are obligated to enrol certain members of staff into a qualifying workplace pension scheme and make minimum contributions to it. Other employees who are not legally required to enrol can decide whether they want to opt in or not. If you already have an existing pension scheme in place you should ensure that it complies with the regulations set out by the Pensions Regulator.

How does auto enrolment work?

Any employee that earns more than £833 per month or £192 a week and is aged between 22 and the state pension age (currently 66) is automatically enrolled into a pension plan by their employer. If a worker earns less than the set threshold, they can request to join the pension scheme. 

Implementing auto enrolment into a business demands extra costs, in the form of pension contributions, as well as the additional resources and time required to stay on top of ongoing compliance paperwork. Also, alongside the increased obligation on payroll, by making auto enrolment part of your processes, you will need to review your employment contracts and employee handbook too.  

There is a lot involved in auto enrolment, it’s not as simple as you might initially think. By using our auto enrolment service, we can take this burden off your shoulders and minimise disruptions to your business as well as looking to reduce the financial impact on your profits wherever we can.

How much should employers contribute?

There is a minimum amount that you, your employee, and the government (in the form of tax relief) need to contribute to the pension scheme. For employers, the minimum contribution is generally 3% and for employees it is 5%. This contribution is applicable on anything the employee earns above £6,240 up to a limit of £50,270, which is known as ‘qualifying earnings’.   

For example, if an employee earns £18,000 a year, their minimum contribution would be a percentage of £11,760. Depending on how you set up your pension scheme, you could apply the pension contribution to the entirety of your employees’ earnings, not just their qualifying earnings.

How we can help you

Jan McDermott Chartered Accountants specialise in all areas of accountancy and tax support for businesses, including auto enrolment services. If you need help and guidance navigating the complexities of pension enrolment, our friendly team of accountants will be on hand to offer key advice and assistance with everything relating to auto enrolment. This means you’ll have peace of mind that this important aspect of your accounting is in good hands, and you’ll have more time to focus on your business. 

Get in touch with our specialists today to take control of your pension auto enrolment requirements.

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Frequently Asked Questions

It’s important to pay your contributions to your employee pension scheme on time. You will need to agree the due dates for paying contributions to the scheme with your provider or trustee.  

You must adhere to the legal duties of automatic enrolment, if you don’t, you can face enforcement action and fines.  

  • If you are late in your auto enrolment duties, you will be expected to pay any missed contributions. This includes backdating contributions precisely to the day that the employee first met the criteria to be part of the scheme. 
  • When backdating contributions, you have to pay all the unpaid employer contributions and your employee must pay theirs. This is unless you choose to pay them on their behalf.

Alan Robson

They provide us with a fully outsourced finance function so that our own team can focus on our business. They implemented Xero software from day one of the company meaning that we have real-time visibility of our business at all times, The monthly management accounts meetings we have with Jan really add value to decision-making and strategic planning and we wouldn’t be without them.

Peter Broxton

Their professionalism, expertise and client care are outstanding and they have supported our growing business no end. They look after everything from our bookkeeping, VAT, annual accounts, as well as claiming Research & Development tax relief, preparing budgets and forecasts and assisting with grant claims. The whole team are always responsive, friendly and reliable and we wouldn’t hesitate to recommend them to anyone looking for a trustworthy and efficient firm to look after their business finance requirements.

Scott Hackett

I moved my accounts over to Jan at the beginning of the year and have been extremely impressed with her attention to detail and precision. She’s made it easy for me to understand and manage all the key aspects of my accountancy, as well as offering useful suggestions of ways to improve and make things work more efficiently for me and my business. I’d highly recommend Jan and her team to anyone looking for professional, friendly, and reliable accountants that truly get to know you and offer a tailored service.”

Alistair Evans

Jan McDermott & Co have been our accountants for over 15 years and have not only ensured our accounting records are accurate and legal, but also provided us with first class advice to help us grow. They recommended our move to Xero accounting software which has revolutionised our business, allowing us to create predictable income through the use of Go Cardless Direct Debits, and streamlining our day to day accounting operations. Jan and her team are friendly,  easy to work with and take time to understand a particular problem or situation. I wouldn’t hesitate to recommend them to any business that wants an accountancy firm they can grow with and depend on.