Auto enrolment

stevo5678

OK I'm late to the party!

Assuming the client has decided to use nest (which some nudging !) I just wanted to know what you guys are charging a) to set up a nest scheme (presuming we can do this as accountants) and b) for the extra month cost?

I am meeting an IFA this week with a view for him to be able to assist my clients with the pension provider choice, apart from deducing which one to use is that really the only involvement we need from an IFA?

I use money soft so assume that the software will work out the status of the workers etc and also what deductions to make when it is live and then I will need basically upload the info to Nest (assuming this is used) each month and advise the client how much to pay over in deductions.

Is there any more to it??

PS - Most of my payroll clients are one man band businesses IE Ltd co directors. I assume they need to be set up in the first place and then there is some sort of procedure to opt out?

Thanks

Steve

AATMIP

I think one man bands are exempt

MarieNoelle

From The Pensions Regulator's website:

"What if my client doesn’t have any staff other than directors?

Your client won’t have any automatic enrolment duties if any of the following apply:

they are the sole director
the only people working for them are a number of directors, none of whom have an employment contract
the only people working for them are a number of directors, only one of whom has an employment contract
Automatic enrolment will apply if more than one director has a contract of employment."

stevo5678

I've just looked at this and I'm not sure how straight forward the employment contract position is.

One thing I've read is that if you are only paid for services and repaid expenses etc then no contract exists but if you are paid a salary then it does. I need to look into this a bit more but I'm happy that a one man band is exempt just need to clarify the husband and wife company position.

Is anyone one on here using anything other than NEST or proposing to. I may get clients to sign a statement if they opt for NEST to basically cover my back (in case there were any issues 10 years down the line!).

Janej

Hi
Does anyone know if an employer who has one employee who works part time and earns under the threshold of £10K needs to go through the process of setting up a pension scheme or are they exempt?
Jane

Londina

Janej said:

Hi
Does anyone know if an employer who has one employee who works part time and earns under the threshold of £10K needs to go through the process of setting up a pension scheme or are they exempt?
Jane

Good point! I'd like to know as well, can't find anything about it in the Pension Regulator website....by looking at their website I feel overloaded by information and yet some others are totally missing :-/

Rozzi Rainbow

Employees who earn between £486 and £833 per month will need to be invited to join a pension scheme (over £833 are auto-enrolled). My understanding is that if there is only these employees (i.e. no-one over £833 to auto-enrol) then a pension scheme doesn't have to be set up unless/until any of them choose to opt-in. But it may be an idea to know which scheme would be set up, in case any of the employees have questions about whether to opt in.

Gem7321

Agree with Rozzi, client still has an obligation to assess and write to all staff about their rights and client still has to complete declaration of compliance. As the client does not have a PAYE scheme as all paid under LEL, there is no letter code to register with TPR. I phoned TPR about this and they said we had to email them with the clients details so they could issue a letter code.

Londina

Does anyone know if the actual pension payment is tax free? Example with NEST, if employee monthly salary is £1800 (£21600 pa) and monthy pension contribution will therefore be £18.00 (1%), does the employee receive £18.00 or less?

BeccaLouJ9

The employee contribution won't be £18 monthly. It will be £21,600 - £5,824 x 1% x 80% = £126.21 per year so about £10.51 monthly. (I think- please correct me if wrong.) they get the full 1% but only pay 80% of the 1%....

Londina

BeccaLouJ9 said:

The employee contribution won't be £18 monthly. It will be £21,600 - £5,824 x 1% x 80% = £126.21 per year so about £10.51 monthly. (I think- please correct me if wrong.) they get the full 1% but only pay 80% of the 1%....

what is the £5824?

I wish the Pension Regulator or HMRC would post some example calculations so we can actually understand how this auto enrolment actually works :-/

BeccaLouJ9

It's the lower level of qualifying earnings that the pension contributions start from. There is an upper limit too.

BeccaLouJ9

Just think of it as like NICs.

Londina

BeccaLouJ9 said:

Just think of it as like NICs.

aaahh I see! thanx