Dear <<First Name>>
For a couple of years now, businesses across the UK have had to provide a workplace pension for all their eligible members of staff. The start date depends on the size of your business, but even the smallest businesses should now be thinking about what they need to do to comply with the new legislation.
This issue of HR Watch is a reminder of what you need to do to meet your staging date and avoid any problems. We also have a cautionary tale about Bill and the Christmas bonuses further down the newsletter, so do read on.
I’d like to take this opportunity to wish you a very Happy Christmas and a prosperous New Year in 2017!
T: 01635 600 305
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Pensions Update – Don’t Leave it to the Last Minute!
If you haven’t already made plans for your workplace pension, now is the time to do something about it. Even if you run a micro business with just a few members of staff, or there is just you as a Director in your business, there are certain things you have to do to comply with the legislation.
When you’re setting up a company pension, you need to use an authorised provider. Don’t try to set up a company pension yourself. The FSB (Federation of Small Businesses) supports companies with fewer than 250 employees and they have partnered with a pension provider to offer FSB members a company pension scheme aimed specifically at small businesses.
The last staging date for the smallest, existing businesses is April 2017 (for businesses established after April 2012 enrolment is between May 2017 and February 2018). Don’t wait until 1 April to look for a scheme to use. By then, many small businesses (and there are hundreds of thousands of them in the UK) could all be rushing to set up a pension at the last minute and the providers might not be able to get everyone processed in time. The Pensions Regulator has detailed information about what you need to do over the next few months, to make sure that you don’t forget anything, or miss your deadline.
The experience of thousands of employers who have already been through the process is that automatic enrolment takes longer than they had expected. With just a few months left to go, you really need to start making arrangements now, if you haven’t already started.
Let your employees know what’s going on and what they need to do. As their employer, you will pay a percentage of their salary straight into their pension; employees also have to pay a percentage of their salary into the pension. This means that their pay packet will be a little smaller than before and you need to warn them about this.
You might also want to consider a salary exchange scheme. This is where employees exchange a percentage of their salary for an equal contribution to their pension scheme. This means that there will be less Tax and National Insurance to pay, as the salary is less. Your staff need to agree to this before you can take this approach.
You also need to nominate a contact within your business – someone to whom all correspondence should be sent – even if you’re using an external pension scheme. Find out more here.
If you still have any questions about setting up a pension scheme for your employees, just get in touch by calling 01635 600305 or by clicking here to email us.
Practical HR – Bonus Time for Bill?
It’s been a good year for Bill’s business. Turnover is up, along with his profit margin, so as the end of the year and the festive season approaches, Bill is in a good mood.
“Time for a company bonus, I think,” Bill confides in Becky, his loyal PA. “Could you buy a case of whiskey bottles so that I can give one to each member of staff?”
“Really, Bill?” queries Becky. “Whiskey for everyone? Are you sure?”
“Everyone drinks whiskey … don’t they?” asks our generous boss.
Becky reminds Bill that Biju doesn’t drink any alcohol, and Brooke, their youngest member of staff, is probably too young to drink. And then she remembers Bailey, who is on maternity leave, who will need something too. She suggests that Bill think of something specific for each member of staff, to make the bonus really special.
“Why can’t running a business be easy?” moans Bill, as he gets out the staff list and starts working through it, to decide what to give to each person.
Employment Law Update
In the Autumn statement the Chancellor announced a number of changes which may affect your business and your employees:
- Abolition of tax benefits for employee shareholders
- Changes to taxation of termination payments
- Changes to salary sacrifice arrangements
- An increase in the National Minimum wage from April 2017
You can read more on all these issues here.
Do you any questions about HR or the staff in your business? Please do get in touch for a completely confidential chat by calling us on 01635 600305 or clicking here to email us