What could happen to you and your business if you fail to comply with the new auto-enrolment regulations?
The Pensions Regulator has recently released a report that outlines what happens when a business owner or director is found to be non-compliant of the new pension auto-enrolment legislation. So, what could happen to you?
Making an Example: Dunelm Group
Leicester Based home furnishing retailer Dunelm has more than 100 stores throughout the UK, so they made a highly visible target when it came time to demonstrate to UK businesses what the consequences of non-compliance actually are. The Pension Regulator’s April 2014 report stated that Dunelm had failed to meet its auto-enrolment duties. The potential penalties for this range from hefty fines for the company itself to action taken directly against its directors personally. In fact, if the Regulator can show that the director was aware of the lapse and allowed it to happen, criminal proceedings can result. The Dunelm case shows us that this will be a rare occurrence, though.
The Regulator determined that Dunelm not only missed deadlines for auto-enrolling many workers, it also failed to make required contributions to pensions and provided incorrect data when it did, eventually, enrol its employees. The directors did face fines, but not criminal prosecution. They key factor in the choice not to pursue a criminal action seems to be that Dunelm appeared to act swiftly to rectify problems once they were brought to its attention.
What could have happened?
The regulator can impose an initial fixed penalty of £400 for non-compliance, but this can skyrocket to as much as £10,000 per day if the company fails to set things right quickly. So far, these extreme measures are only a threat to cause swift action, but a very effective one.
Are you in Compliance?
That is a fairly complicated question. Consult your accountant or a pension expert to find out for sure.
We have partnered with a pension provider to be able to offer you an amazing (and cost effective) auto-enrolment solution. Please get in touch with us on 01924 262133 to find out more.
Thanks, Paul Harrison