New businesses which launched from 1 October, must include staff pension schemes in their start-up costs, even if they are only employing one person, a local tax specialist has warned.
Yogesh Pathmanathan who runs TaxAssist Accountants in Greenwich and Woolwich said: “From October, any business start-up which employs an eligible staff member, must automatically enrol them on a company pension scheme and contribute to their pension pot.
“There is no breathing space for new businesses under the new pension rules, despite the host of other cost considerations they face as they launch their new enterprise. They must set up a company pension scheme and a total of two per cent of eligible staff’s wages must be contributed; of which at least one per cent must come from the employer. Those percentages will increase year-on-year until they reach a total minimum contribution of eight per cent in 2019; of which at least three per cent must come from the employer.
“Between now and March next year, some 400,000 small businesses across the UK will be reaching their staging date for workplace pension schemes and we’re advising many local business owners, who have now received notices from the Pensions Regulator.
“Many have planned well in advance and have fully compliant pension schemes up and running already, but for those employers yet to comply with the new rules, they must act quickly.
“The Pensions Regulator is carrying out spot checks across the country and can impose a £400 fixed penalty, escalating to daily fines set at a minimum of £50 per day for non-compliance and the possibility of civil penalties and court action.”
TaxAssist Accountants Greenwich and Woolwich is a local business, based in London providing tax and accountancy advice and services purely to small businesses.