Very Small Business and AE

Froggitt

The AE website is shoite for information, but I registered as I cant tell if I need to do AE or not.

I run a Ltd Co, where I am the only director, and my wife is employed part time for admin and support at £4k a year.

Is my Co caught by AE?

AbbieCadabra

if you employ anyone, then yes the AE scheme applies

http://www.thepensionsregulator.gov.uk/employers/your-step-by-step-guide-to-automatic-enrolment.aspx

but at that level of salary, it will only be on the basis that the employee 'has a right to join', http://www.thepensionsregulator.gov.uk/employers/check-who-you-need-to-enrol.aspx

confused? you soon will be!

we've got less than 5 employees, none of which want to join (aren't interested or already have a private pension). we've still got to set up the scheme & go through the processes required, then get confirmation from employees that they don't want to enrol, advise this 'officially' to the scheme, then do it all again as & when required.

i queried this arrangement with NEST last year & they said there would be no fees payable on this basis, but it could change in the future (what, when they realise just how many small business employees will be opting out & there will be so many 'empty schemes' on their books? cynical, me?!)

LHW99

We have 2 directors, but pay ourselves a small monthly salary. We will both opt out as will also both be within 18 months of retirement when the staging date arrives, but at present it appears we need to comply (have emailed the Regulator to confirm, but no answer likely for a while methinks.

AbbieCadabra

here's the NEST pension info, no cost (at present) if scheme set up but all opted out. more general info on AE here, pensions regulator.

looking at the NEST site now, there's a lot more info available than the last time i looked. for us it looks like it will be - set up scheme nearer to our required date Nov 2016, then the employees will have 1 month & 3 days to confirm to Nest that they wish to opt out (online, by phone or paper form, which takes longer), anyone not opted out will start having pension deductions made from their wages & we'll have to pay fees on those contributions.

there's a lot more to it than that so i'll have to spend some serious time nearer our staging date to get sorted, one more thing to add to the work calendar!

NB from the regulator site "Remember, automatic enrolment is your legal duty and if you don't act you could be fined." guessing that they won't enforce this straight away, but i'll put money on lots of small/micro businesses falling foul of this one.

LHW99

As mentioned above I have contacted the Pensions Regulator, who has now confirmed our Company is not "an employer for the purposes of autoenrollment"

You could therefore try doing this:
Have a look at the website
https://www.gov.uk/employment-status/overview

This will link you to pages detailing specific things that add up to being an "employee" rather than an office holder/director.

If you think both you and your wife satisfy most conditions for not being employees, then email a list of the reasons why (and your company PAYE reference) to the pensions regulator at:
[EMAIL="customersupport@autoenrol.tpr.gov.uk"]customersupport@autoenrol.tpr.gov.uk[/EMAIL]

Ask them to confirm if you / your company are exempt or not.

They are not overly swift in responding, but you should get an acknowledgement in a couple of days, and a response in a couple of weeks.

AbbieCadabra

thanks for sharing that info LHW. i've started a thread in the small business section on AE & i've just shared your info there for future reference.

the decision from the regulator is purely based on your employment status, nothing to do with how close to retirement you are? just checking as i'd imagine that there will be lots of micro businesses in exactly the same set up as yours, but completely unaware of this for AE.

edit: having just read the link on employment status, you pay yourselves a regular salary, how does that not qualify you as an employee as it states "A person who’s been appointed to a position by a company or organisation but doesn’t have a contract or receive regular payment may be an office holder." seems that fact alone would make you an employee but i'm obviously missing something?

LHW99

It was based on a number of criteria, listed under the employee category, which we do not meet - hence the use of the phrase "not an employer for the purposes of autoenrollment".
Age is not in fact relevant, had we been classed as an employer, we would have had to set something up at NEST (for example) at our staging date, and then individually opt out (that would only happen once though, as after that we would both be past SPA).
The lack of a contract is important, see
http://www.thepensionsregulator.gov.uk/employers/What-if-I-dont-have-any-staff.aspx
However, in our case there are other factors, such as either director able to undertake part of the work of the other, no defined hours of work (we are often required to turn around work within a few days, so will work at evenings / weekends if need be, and take time off when things are slack, which is unpredictable), which can also add in to whether the company is exempt or not.
We do not plan to expand the company to take on additional workers, but should we decide to do so in future, then we will have to notify the Regulator, and probably set up a scheme.

Froggitt

I find all the official websites on AE useless to put it mildly. Can anyone suggest whether they think my company is caught by AE?


Neither me nor my wife have contracts. Each of us work when there is work to do. I take £12k pa (£1k pm), she has £4k pa (£333 pm). I am a director, she does the admin and is not. Both of us are shareholders.

jamesd

Froggit, making her a director may be easiest. Else ask the regulator what they think. Worst case is wasting time with NEST, who have to accept you even if they know that they will make no money from you.

AbbieCadabra

Froggitt, i'm with James, make her a Director (would Company Secretary be the same too?) otherwise she's got to be classed as an employee 'with a right to join', won't she?

blimey, i never fully appreciated just how much of a minefield this was going to be. i think so many are going to get caught out with this.

Froggitt

What a PITA. Thanks all for your suggestions. I wonder what implications making her a director will have outside of AE