Many businesses have received letters from the government about auto enrolment of staff onto pensions. These letters are little more than marketing babble and nasty scare tactics.
Lie Number One: Apparently, the government will pay into employee pensions too: err, no, its the employee and employer who pay in. The government’s “contribution” is by not taxing what you put into the pension, and treating the pension cost as a tax deductible expense of employment for the employer: nothing new here!
Pensions have always attracted tax relief, there really is nothing new here. Are they saying in future that pension contributions will be taxed, by now highlighting they aren’t? Wouldn’t suprise me. I even had a client asking whether she should pay in herself, into an auto enrolment pension scheme rather than pay into her own bespoke pension, since she read in her letter the government pays in too!
Lie Number Two: the letter says that businesses MUST do something by a particular date (that they made up), around 6 months or a year before the staging date (the deadline when the employer must have relevant workers enrolled). That is simply not true.
Please ignore these letters, they are to scare the employer and pretend the government is doing their bit, so you should now do yours. The only date you need to know is the staging date, probably around 2 years from now (for small employers). Ensure the pension is set up by then and ignore marketing letters from the government.
If you are a business in or around Guildford and want unbiased advice, as chartered accountants providing Auto Enrolment services, we can tell you what you need to know (if you become our client of course!).