In the UK today, millions of people are failing to save enough to have the income they would like in retirement. Life expectancy is increasing but people are saving less into pensions. To meet this challenge, the Pensions Act 2008 laid the foundations for a fundamental reform of workplace pensions requiring every employer to automatically enrol their workers into a qualifying pension scheme, if they are not already in one, and contribute to that pension. Between 2012 and 2017 all employers will have to offer a workplace pension.

The start date for the rollout of the changes was October 2012 and at that time only employers with 120,000 workers or more were affected. For those with a more modest workforce the start date varies, for example those with less than 500 workers the date is 1 January 2014 and for those with less than 50 workers the earliest start date is 1 August 2014.

Who is eligible?

Workers eligible for automatic enrolment will be:

  • those who aren’t already active members of a qualifying scheme
  • are aged between 22 years and the State Pension age and
  • earn over £8,105 gross a year.

The qualifying scheme may be the existing employer pension scheme if it meets certain conditions, or if an employer does not have a qualifying scheme they will have to set one up or use a NEST pension scheme.

What do employers have to do?

You will have to automatically enrol your eligible workers into a qualifying pension scheme and make an employer contribution towards it. The main things you must do are:

  • provide a qualifying scheme for your workers
  • automatically enrol all eligible jobholders into the scheme
  • pay employer contributions for eligible jobholders to the scheme
  • tell all eligible jobholders that they have been automatically enrolled and they have the right to
    opt out or
  • register with The Pensions Regulator and give them details of your qualifying scheme and the number of people that you have automatically enrolled.

You must not:

  • encourage your workers to opt out of the qualifying pension scheme
  • have recruitment practices that will benefit job applicants who indicate they are prepared to opt out or
  • treat a worker unfairly or put them at a disadvantage because of automatic enrolment.

How much will employers have to pay?

From 2012 the legal minimum is 2 per cent of a worker’s qualifying earnings. Of this the employer must pay at least 1 per cent. The legal minimum requirement will rise gradually to 5 per cent by October 2017 (of which the employer must pay 2 per cent) and 8 per cent from October 2018 onwards (of which the employer would be liable for 3 per cent).

Qualifying earnings is the band of gross annual earnings on which contributions are calculated, currently between £5,564 and £42,475 a year in 2012/13 terms. This includes a worker’s salary, wages, overtime, bonuses and commission, as well as statutory sick, maternity, paternity or adoption pay. Contribution levels will be phased in over a period of time 


Employee Pays (less tax relief)

Employer pays

Before October 2016



October 2016 – October 2017



From October 2017



 What should you do if you have an existing scheme?

Even if you already provide a pension scheme for your workers, you will need to check if it is a qualifying scheme. It will need to meet certain requirements depending on the type of scheme you have. It must also be appropriate for automatic enrolment. You can find out more by visiting The Pension Regulator’s website at and following the links to ‘pensions reform’.

How do you know if your existing scheme is a qualifying scheme?

Many occupational and group personal pension schemes will qualify. To be a qualifying scheme, it needs to meet certain requirements. To be a qualifying scheme, minimum contributions must be made or it must provide a minimum rate at which benefits will build up. Even if it doesn’t qualify at the moment, you may be able to change the scheme rules or amend the terms of the policy so that you will be able to use it by the time your staging date comes around.

Please contact us if you need any help.

Identify your ‘on’ time and schedule it

Your ‘in’ time will always happen because of the urgency factor.  And in challenging times it will have a little stress and adrenaline thrown in as well.  As you walk into the office at ten to eight and start clearing email, you will be sucked into an ‘in’ day.  It’s not a bad kind of day, but it’s a fire-fighting day, a surviving day; it’s not a thriving kind of day.  Take your schedule and block out some on time.  Time you will preserve at all cost.  To invest, to improve, to step beyond the day-to-day stuff.  It will of course depend on your role but here are some suggestions:-

  • 15 minutes at the start of the day where you take stock, scan the strategic plan and think beyond the day-to-day pressures.
  • 30 minutes at lunchtime where you get out, take a walk and think.
  • 15 minutes at the end of the day where you review success and note key points for later in the week or month.

Schedule further sessions during the week for planning and team meetings.  When they appear people will resist but remind them they are investing to make things easier in the future.

Key message – Invest for future success.


HMRC Visits: Trouble in store?

Many businesses dread a visit from HMRC. There is always the worry that something may come out resulting in paying more tax but there is also an understandable sense of dread at the potential disruption it could cause in the run up to the visit, during the visit and even following the visit. However, there are a number of things you can do to make the experience far less stressful.


Most HMRC visits are pre-arranged either by telephone or letter. If the appointment is made by telephone, ask the officer to confirm in writing the details of the visit – not only the date and time but the expected length of the visit. Ask for confirmation of who will be coming, what their roles are in the enquiry overall and exactly what records, if any, they want to see. Ask at the outset are there any particular risk areas they have identified in selecting you for an inspection and have all of the requested records ready for the visit.

If they are to be left in a room make sure it is clean and only has the information requested in it. Of course it may not be possible to prepare in advance if HMRC don’t give warning of a visit.

Unannounced Visits

There are generally two types of unannounced visit and you should clearly establish at the outset what is happening. The first is generally where a routine inspection is being carried out but there has simply been a failure somewhere along the line to notify the trader. You may simply ask HMRC to come back another time when you will have the records ready and will also have time to let your accountant know of the visit.

The second is what is where HMRC deliberately does not forewarn the business but simply turns up. In this case there will be a formal notice signed either by a Tribunal or An Authorised Officer of HMRC. This notice is actually a request to enter the premises. IT DOES NOT GIVE HMRC AUTOMATIC RIGHTS OF ENTRY. There is no penalty for refusing entry for a notice signed by the Authorised Officer. There could be an initial penalty of £300 if the notice has been signed by a Tribunal but even then only if it is held that there was not a reasonable excuse for not permitting entry perhaps because the trader wanted his accountant to be there perhaps. These visits are not random and our advice would be to seek professional advice before letting them in.

Be aware that the visiting Officers will initially ask for the business owner. If he/she cannot be traced they can ask anyone who is in charge at the time. If no one is actually in charge at that time they can simply enter the premises and leave the notice displayed in a prominent place. They need only be told “no” once and they should not enter.

Know Your Rights

HMRC does not have any absolute right to meet the business owner. Both announced and unannounced visits are inspections not searches. They have the right to ask to see any business record which is reasonably required to check your tax affairs. If there is any uncertainty over whether an item is reasonably required HMRC should be challenged instantly rather than afterwards. Also, the extent of the inspection should have been made clear prior to the visit and this should not be extended without justification.

You do not even need to have the inspection at your business premises if it would be better or more convenient to have it at the accountant’s office. Their attendance at your premises must still be reasonably required in preference to elsewhere. HMRC must be courteous and polite to you at all times and explain what they need to see and why.

Be Nice

HMRC Officers are human beings and have the same right to courtesy as the rest of us. An Inspector that feels he has he has been mistreated will be far more inclined to dig his heels in to find something and also when negotiating penalties. Refreshments and warmth are expected.

Take Advice

 If HMRC make any contact with you direct you should always let your accountant know who called and what they said. Let your accountant decide if they need to get involved. Always let your advisor know the outcome of the visit. It is good practice to ask HMRC to issue any follow up in writing.

If you are not currently protected against the professional costs incurred when you have a tax investigation or enquiry, please contact us for more information.

What does your website say to the world?

You know very well its a busy, busy world out there.  More so in recessionary times, and in times of financial hardship people are often a little stressed as well.  So, once they have decided to find out about you by looking at your site, is it a straightforward experience or do they have to wait for a clutter of clever graphics to load?  Can they find your phone number in seconds? …  An overview of your products? … An address if they want to send you something? 

Make it easy to deal with you – even in the most traditional of businesses, your website is increasingly how you are viewed.  Check that everything, especially prices if revealed, are up-to-date and that you are being analysed properly on comparison tables.

Key message – Create a brilliantly simple and basic website.