Expert Online Accountants Urge Businesses to Brush Up on Auto-Enrolment – Before They Face a Penalty

pension chart from online accountants

The expert team at online accountancy service Magic Accounts are encouraging all businesses to brush up on their understanding of auto-enrolment, and to implement any necessary changes, before they are hit with serious penalties that could affect their bottom line dramatically. The new legislation, which has made it compulsory for every employer to automatically enrol employees who are eligible into an appropriate pensions scheme, came into effect in October 2012, and was originally intended to ensure that larger businesses comply, but by 2017 every business in the country will be affected – and the team at Magic Accounts are braced for a tidal wave of worried clients unsure of how to handle the new rules.

Laurence Collins, Managing Director of Magic Accounts, says, “The rules regarding auto-enrolment have already been in place for some time, but now companies are starting to face penalties for non-compliance, and the issue has become a lot more emotional for many businesses across the country. Right now, businesses with more than 50 employees are the main target of the rules, and we would like to encourage those who haven’t yet adopted this system to do so or risk facing a heavy fine.”

He adds, “To prevent widespread discord and panic among the country’s businesses in 2017, when the rules will become relevant to all companies large and small, we are also encouraging business owners to start looking into setting up an auto-enrolment scheme that will keep them in line with the legislation ahead of time. This will minimise the risk of penalties for them, and will also ensure their employees are seeing the benefits of automatic pension enrolment.”

Financial penalties for those who do not partake in this scheme could hit the dizzy heights of £50,000; the figure is a powerful warning for businesses who are dragging their feet about entering into auto-enrolment. Daily charges can also be added, resulting in catastrophic fines for those who do not comply with the rules.

It is not just businesses that are coming to terms with the auto-enrolment legislation. Bookkeepers, financial advisers and online accountants like the team at Magic Accounts are also brushing up on their knowledge of the new rules in order to ensure they can assist their clients when the time comes for them to make the change. Many businesses will use this upcoming opportunity as a chance to review their accounting options and switch to different methods, and the experts at Magic Accounts are welcoming of all clients who want to ensure they remain on the right side of the new auto-enrolment legislation, even more the rules are enforced.