New employers that establish PAYE schemes after October 1st will have to automatically enrol their staff into a pension scheme four months earlier than those set up in September, TPR has confirmed.
The regulator has confirmed that staging duties will be immediate for any new employer from October 1st this year, whereas those set up in September will not reach their staging date until February 2018.
Next year will also see the first round of increases in contributions, from the current minimum of a total contribution of 2 per cent of qualifying earnings to 5 per cent from 6 April 2018, and on 6 April 2019, rising to a total minimum amount of 8 per cent. If the employer has chosen to use certification, there are corresponding incremental increases in the applicable contribution rates on these dates.
Cavendish Ware Wealth Management & Financial Planning associate director Roy McLoughlin says: “This is going to come as a big shock to newly established firms. Anyone thinking about setting up a new company in the early autumn may want to get it done before the 30 September cutoff point to give themselves a few more months before they have to sort out auto-enrolment.”