Small companies and contractors across the UK are running the risk of being hit with large fines if they fail to hit the Government’s auto-enrolment deadline.
According to data from The Pensions Regular (TPR), fines totalling around £25 million could be levied against small firms and contract workers as a result of £400 fixed penalties given for missing the deadline.
Between this year ad 2018, around 1.8 million workers will need to create pensions – so far, 63,700 firms have done so since July of 2012, and more than 95 have complied with the legal regulations. However, the rest have been fined or given rising penalties.
If this rate of fines continues, around 63,000 small and micro UK employers will be given non-compliance fines between now and 2018.
Catherine Pinkney, the co-founder of Paycircle, which commissioned the report, said: "Not only will many of the UK’s smallest businesses face significant set-up costs for their workplace pensions, but a large number, according to the latest data from TPR, will also receive a fixed penalty fine.
"In reality, the percentage of smaller employers that incur a penalty is likely to be higher than the rate to date as smaller companies have fewer people and time for administration duties. Now is the time for small firms to be proactive about auto-enrolment, or face fines that can rapidly escalate," added Ms Pinkney.