Non-compliant employers face pension spot checks

July 25th, 2019

Businesses that fail to comply with auto-enrolment rules could be caught out as The Pensions Regulator (TPR) continues its campaign of spot-checks this summer.

New rates for auto-enrolment came into force in April this year, meaning that businesses must ensure that a total minimum contribution of 8% is reached for each employee.

As part of the crackdown, data sent to HMRC will be checked to ensure that all eligible staff are auto-enrolled and that the correct level of contributions are being made.

Under the Pensions Act 2008, an employer must provide a pension scheme if they have at least one staff member aged between 22 and state pension age, who earns more than £192 per week (£833 per month or £10,000 per year).

If a business is found to be non-compliant, they could receive an inspection from TPR at short notice.

Darren Ryder, director of auto-enrolment at The Pensions Regulator, said:

Our data and intelligence streams enable us to detect potential non-compliance and take swift action against employers. This allows us to target our resources in a very focused way as part of our role to protect pension savers.

A minority of employers who ignore their responsibilities can expect a knock at the door from us, and enforcement action.

If a business is targeted by a short notice inspection, it’s important that they are fully cooperative with the watchdog, as failure to provide information to an Inspector when requested is classed as a criminal offence.

If an employer fails to comply with statutory notices for auto-enrolment, they could face an initial £400 fixed penalty notice.

For those who don’t comply after a statutory notice, TPR can issue an escalating penalty notice (EPN), with fines of between £50 and £10,000 per day, depending on the number of staff.

Contact your local Champion Accountants practice today to discuss your auto-enrolment duties.

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