Automatic enrolment and small employers

Businesses who employ only one member of staff (who is employed on a temporary basis, who earns under the qualifying earnings threshold of £10,000 and who does not need to be automatically enrolled into a pension scheme) will still have automatic enrolment duties. 

The Pension Regulator (TPR) has highlighted to businesses what they need to do. 

The Pensions Regulator writes to all employers to alert them to their duties 12 months before their staging date. The staging date is when your legal duties start.  Go to TPR’s website and take five minutes to complete the online duties checker. This will help you understand how the law applies to you and what duties you have to do and by when – and to avoid the risk of a fine. 

Are you an employer?
You are an employer if there is a contract of employment – whether this is written or verbal between you and those who work for you. Even if someone who works for you considers themselves self-employed, you may still have employer duties. While deciding if someone is a worker may be clear-cut in many circumstances, it can be more difficult in others. A person may be a classified as a worker if they meet a number of criteria including:

• whether you expect that person to personally carry out work for you,
• if you provide what they need to carry out the work (for example tools)
• if you bear financial cost for faulty work.

Once you have decided who is a worker for automatic enrolment purposes, you must then check what your duties will involve and if any of them must be put into a pension scheme. 

If you decide you are not an employer (eg you are a sole director company with no other staff) and so you do not have duties you should use the duties checker to let TPR know this is the case.  

If you do not have any workers to automatically enrol in a pension scheme, you still need to write to them to tell them about automatic enrolment and how it applies to them. Template letters that you can use are available on the Regulator's website. 

Whether or not you have workers who must be put into a pension scheme, you need to complete a declaration of compliance and submit it to The Pensions Regulator to let them know you have met your duties. The declaration of compliance shows TPR what you have done to meet your duties and must be completed within five months of your staging date – if you don’t do this on time, you may incur a fine. 

If you don’t have anyone who needs to be put into a pension scheme, you can bring your staging date forward to any date, so that you can meet your duties at a time that suits you. You will need to tell TPR either on or before your new staging date and you’ll need to provide all of the information below:

• your PAYE reference – found on letters you have received from TPR about automatic enrolment
• your letter code – a 10-digit reference that appears on all correspondence from TPR about automatic enrolment
• your current staging date and your new staging date
• employer’s name, address (including postcode) and email address
• if you have one, your Companies House registration number or equivalent, eg registered charity number, VAT registration number or industrial and provident society number.

You can choose to complete your declaration of compliance at the same time as you bring your staging date forward. Completing your declaration early means you can get this task out of the way and don’t need to think about it any more. If you decide not to do this, you must complete your declaration within five months after your new staging date. 

I do not have any staff to put into a pension scheme. Can I bring my deadlines forward?
If you do not have any staff to put into a pension scheme, you can bring forward your staging date and complete your declaration of compliance early. If you plan to bring your staging date forward you must notify The Pensions Regulator. 

We’re a family business – do automatic enrolment duties apply to us?
Whether you have duties will depend on your roles and if you have employment contracts in place. To find out if you have automatic enrolment duties, and what to do if you do not, complete the duties checker on TPR’s website. 

I'm the only director of my own company – do automatic enrolment duties apply to me?
If you are the sole director and you have no other staff working for you, the company does not have automatic enrolment duties. If you believe you don’t have any automatic enrolment duties you will need to tell TPR that you’re not an employer – you can do this by completing the duties checker on TPR’s website.