Insights

One of TaxTalk's partners, Foster Denovo has informed us of an important change to the rules concerning the provision of employee pensions by small business owners.  It's a development likely to impact a number of our clients and we can offer a free initial consultation with Foster Denovo to anyone looking for more information

What has changed on pensions?
The government has agreed that all UK businesses, regardless of size, should offer a company pension scheme or enrol their staff into the new National Employment Savings Trust (NEST). This will mean compulsory contributions of up to 3% from the Employer and up to 5% from the Employee.

NEST will be a national, low charge, workplace pension scheme any employer can use to comply with their duties imposed by the new pension regulations, which includes automatic enrolment.  As part of wider pension reforms, millions more employees will also be enrolled automatically into their company's pension if it offers a quality scheme

Employees can opt-out of their employer's scheme but Employers are prohibited from inducing employees to opt out of the company pension arrangements or NEST. There will be a fixed penalty for inducing employees to opt out ranging from £1,000 to £5,000, based on the number of employees in the company.

What do I have to do?
The pension reforms will be introduced in stages, starting from October 2012. This means that certain companies, particularly smaller sized ones, will not have to comply with the new regulations until as late as 2016. However, companies should be taking advice as to how to comply with these new regulations and if they have an existing pension scheme whether it can be used instead of establishing a new NEST scheme.

Contact us through Paul Webb pw@rjp.co.uk to arrange a free initial consultation with André Jordache at Foster Denovo.