A morning of auto enrolment

Solomons-financial-advisor-wimbledon-top-bannerA morning of auto enrolment

Today I spent the entire morning hidden away in the company of auto enrolment experts…. Its almost as though there is a theme building in this blog. Anyway, there were some great speakers and presentations, thankfully nothing was terribly surprising, other than perhaps the candour. As I had outlined here previously, the real issues have little to do with pensions and everything to do with compliant processes and systems that work.

 34 and counting…

Reliance on a payroll system may be misplaced (its not easy to tell) but one major pension provider outlined that there are 34 data fields required for each employee…can you think of 34 questions about your staff? Name, date of birth, NI number, salary, home address, email address, contribution rate…. And so on. There was no denying the importance of accurate and correct data and of course this needs proper checking and policing for security – involving your IT department or if you don’t have one… your IT person/supplier etc.

Concern about loss of pension allowance protection

My only real concern was in relation to lifetime allowance protection, after all payments into a new pension (such as auto enrolment) will, (under current rules) undo any pension protection. The thing is that employers are not permitted to advise staff not to join the auto enrolment scheme and indeed most financial advisers aren’t either due to a quirk in the rules which prevents anyone that does not hold G60 (an exam that can no longer be taken) from advising people not to join an employers pension. Yes, its daft and everyone seems to be relying on HMRC providing some sort of exemption or providing the advice themselves…. Yet here we are with lots of firms with auto enrolment already under way… now call me a cynic, but waiting for the right thing to be done seems unrealistic and naïve.

Good employer?

One of the good things about today was that many, well most, employers are actually pretty keen on providing staff with a pension. Yes there are some that seem to think it won’t happen (good luck with the fines) and as one commentator put it, there will be 100% take up, because 100% of employers have to offer and run a scheme, some (about 10%) of the staff will opt out, but even if 99% opted out, the rules must still be adhered to. So… better get on with it. Here is a little video about AE from a SME… yes the jargon is now in full flow! thanks to Standard Life.

Dominic Thomas: Solomons IFA

A morning of auto enrolment2017-01-06T14:39:40+00:00

When does Auto Enrolment start?

Solomons-financial-advisor-wimbledon-top-banner

I have had a number of queries about auto-enrolment, in particular when does auto enrolment start? The short answer is that it already has started – at least for large firms with upwards of 800 staff. Next month (November 2013) the next tier of employers must implement their schemes – those with 500-799 staff. Small firms, which generally means those with fewer than 50 staff have a staged launching date beginning in June 2015. All firms have a “staging date” and this can be found on the pension regulators website, all you need is your PAYE reference number (as the employer).

However small firms should not be  under the impression that time is on your side. Setting up a scheme involves certain processes and assessments to be completed. This takes time. Whilst the Government have sensibly staggered the start dates, the reality is that most firms in the UK are small and there will be a rush and backlog. Given the prospect of fines and the amount of advanced warning, I don’t think it wise to hang around on this. I’ve been advised by various pension companies offering a scheme that they are already struggling to cope… and we’ve only just begun. So the time to begin to act on this is now. Here’s a good little video about auto-enrolment.

Dominic Thomas: Solomons IFA

When does Auto Enrolment start?2017-01-06T14:39:44+00:00

Auto enrolment – fools rush in?

If you are not drawing your State pension, then by now you should have picked up that pensions are changing – again! This time rather than making employers set up a pension that nobody might use, they have decided to force employers to set up a pension that everyone in that firm will use (unless they have an exemption or opt out). This will include mandatory contributions, which will be 3% from the employer and 5% from the employee (eventually). Whilst the employee can opt, he or she will be opted back in after 3 years (with the option to opt out again) – the ideal being that eventually you will forget and naturally begin building up a pension. Auto-enrolment is the path of least resistance.

Employers have begun (well some months ago) asking about AE. To say that there have been teething problems for the first of the large schemes would be an understatement. So today Steve Webb has intimated that SMEs will have a more simplified approach – now please note that AE is already meant to be a “no brainer” with no question asked other that “do you want in or out?”. I am left perplexed at what other new idea could be so simple… perhaps reforming NI and collecting payments directly would be sensible? I suspect that such “radical thinking” would be rather unwelcome. Anyhow when any Government uses terms like “simplified” or “simplistic” my cynicism really kicks in, as invariably this is code for “we have no idea of the consequences” but someone at a think tank thought this would work.

I am attending another presentation on AE next week, I am hoping that this will provide better insight into the latest “alteration”. I freely confess that it is better to change and adapt based upon experience, but for once, it would be nice to have some firm guidelines so that we all know where we stand..

Auto enrolment – fools rush in?2013-03-07T12:41:43+00:00

The Best Tax Systems In The World

The Best Tax Systems For Entrepreneurs

The UK is currently 16th in the world when it comes to the best tax system in the world for small to medium sized businesses. PWC, the big Accountancy firm conducted research on a global scale over several years. They considered the rates of tax, the time taken to pay it and comply with tax rules as well as the number of times tax has to be paid in a year. The UK’s position is improving, but still not in the top ten. This suggests that UK Governments are making it a little easier for entrepreneurs to start and develop their businesses. This after all is where economic growth is found and where wealth for individuals and the nation is created. However Ireland our closest neighbours is rather more favourable and ranked 6th by PWC.

Cutting Through The Red Tape

PWC are reported to have found that the typical UK SME now spends 267 hours a year complying with tax rules. A decrease of 54 hours over the eight year period that was reviewed, representing a 17% improvement. They also found that the average medium sized firm pays a tax rate of 44.7% on profits.

The Top Twenty Tax Systems

For those of you that like lists, the top twenty are as follows:

  1. United Arab Emirates
  2. Qatar
  3. Saudi Arabia
  4. Hong Kong
  5. Singapore
  6. Ireland
  7. Bahrain
  8. Canada
  9. Kiribati
  10. Oman
  11. Kuwait
  12. Mauritius
  13. Denmark
  14. Luxembourg
  15. Malaysia
  16. UK
  17. Kazakhstan
  18. Switzerland
  19. Norway
  20. Seychelles

Of course, entrepreneurs seek solutions to all manner of problems when it comes to running a business. A common trait amongst successful entrepreneurs is that they collaborate creatively and take responsibility for their actions. These are precisely the sort of people I work with.

The Best Tax Systems In The World2017-01-06T14:39:51+00:00
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