Start-ups alerted to instant pensions duties

12 May 2017

New businesses which start up from October this year are being warned they will have instant pension duties as soon as they become employers.

The alert comes as the current schedule for employers to meet their automatic enrolment duties comes to an end. All businesses which existed before April 2012 have now passed their staging date.

Those who become employers for the first time on or after 1 October 2017 will immediately have legal duties for their new member of staff. These duties apply from the first day the first member of staff started working for them. This is known as their duties start date.

The Pensions Regulator (TPR) will write to new employers to tell them what they need to do and by when, and has also launched a new online suite of information and tools for new businesses and their advisers.

No PAYE scheme

If staff earn £113 per week (£490 a month) or below, then HMRC may not require the employer to set up a PAYE scheme. However, the employer does still have certain duties, and must start to complete them as soon as they employ their first member of staff:

  • they must write to their staff to tell them how automatic enrolment applies to them

  • if their staff then ask in writing to be put into a pension scheme, the employer must set this up for them but they do not have to pay into it.

There is a new employer landing page on TPR’s website.