June

How to avoid the auto enrolment capacity crunch

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If you provide any taxable benefits to employees then you must submit to HMRC a P11D form (or P9 for employees earning less than £8,500 per year) for each employee receiving benefits.  You must also submit one additional form, P11D (b), to declare the overall amount of Class 1A National Insurance contributions (NICs) due on all the expenses and benefits you’ve provided.
Examples of taxable benefits include:
Private medical insurance
Company cars
Gym membership
You must also provide a P11D form to each of your employees which details the benefits they have received over the year and tax due.
Time is of the essence!
The deadline for submissions is 6th July 2014 and payment of Class 1A NICs should reach HMRC by 22nd July.  The HMRC will impose fines for late submissions – currently £100 per 50 employees for each month or part month that a return remains outstanding.  
Submitting returns
Many companies ignore their P11Ds as they are unsure what to do and how to go about working out the tax that is due for each employee but with the fines mentioned above you could end up with a nasty surprise by not staying on top of this once a year task.
The fastest, easiest and most secure way to submit your returns is electronically.  Quality of returns is extremely important to ensure they are not rejected by HMRC.  Using a specially designed software such as IRIS P11D Organiser will ensure that the often complex calculations are performed correctly and that the returns contain accurate information so are accepted first time.   Things get even easier after year one as benefits can be rolled forward and items inputted throughout the year as necessary (preventing the last minute rush!)
Click here for more information on IRIS P11D Organiser. To arrange a free online demonstration please call the IRIS team on 0344 815 5677.

IRIS have identified 4 challenges of automatic enrolment.  Challenge 1 will be the capacity crunch - look out for more challenges coming shortly!

‘We’re all in’ is the catchphrase of the auto enrolment adverts and while it is true that it will affect everyone at some point, the number of workers who are ‘in’ an auto enrolment scheme at the moment is just the tip of the iceberg.

2014 is the first big year for auto enrolment when over 30,000 companies will reach their staging but this is a tiny number compared to the huge number of 850,000 businesses who will stage in 2017.  

How the number of companies staging will increase:

2014     32,000
2015 44,500
2016 450,000
2017 850,000

 

Don’t get swallowed up by the tsunami

Experts are already predicting there will be a capacity crunch as IFAs and pension companies will not have the resources to handle the huge numbers of companies that will need their assistance.  This will lead to:

  1. Lack of choice in pension schemes
  2. Prices increasing as demand outstrips supply
  3. Long lead times for advice and set-up

Preparing early will mean you can have your pension scheme and systems in place and can relax while other companies are battling against the tide!

What you can do now

Start to plan for auto enrolment as early as you can by making sure you know the key steps you’ll need to take. 

Early indications are showing many businesses are already under-estimating the amount of time needed to get everything in place and have already missed (or are in danger of missing their staging dates).

Tip 1: Know your staging date as it may be sooner than you think.  Don’t rely on receiving a letter from the TPR as it may have been discarded by someone else within your organisation or be lost in the post.

Tip 2: Prepare early.  Research has shown that 52% of companies wished they had started to prepare for automatic enrolment earlier than they did.  Starting in plenty of time (and experts including TPR and NEST recommend preparing at least 12 months in advance) means you don’t have to rush through getting everything in place.

Tip 3: Understand the legislation so you don’t miss any key steps.  Once you understand what you need to do you can start to get your systems and processes ready.

How IRIS can help: 

Training: You don’t have to spend weeks learning reams of legislation as IRIS has put everything you need to know into an easy to understand auto enrolment training seminar.

Software: Having the right software in place can save hours each month.  The IRIS AE Suite can automate the auto enrolment process for you to make your life easier.

You can also download your free IRIS guide to automatic enrolment today.

Posted by
Julie Smith
24 June 2014
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