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Start-ups must provide staff pensions or risk being fined, warns local tax specialist

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Written by: Hannah Baker | Posted 24 October 2017 12:24

Start-ups must provide staff pensions or risk being fined, warns local tax specialist

Businesses that launched on or after 1 October must include staff pension schemes in their start-up costs even if they are only employing one person, a local tax specialist has warned.

Ali Redwood, who runs TaxAssist Accountants in Clifton and Portishead, says businesses must automatically enrol employees on a company pension scheme and contribute to it.

“There is no breathing space for new businesses under the new pension rules, despite the host of other cost considerations they face as they launch their new enterprise,” she said.

Two per cent of an employee’s wages must be contributed to the scheme, of which at least one per cent must come from the employer.

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The percentages will increase year-on-year until they reach a total minimum contribution of eight per cent in 2019 (by then at least three per cent must come from the employer).

Redwood added: “Between now and March next year, some 400,000 small businesses across the UK will be reaching their staging date for workplace pension schemes and we’re advising many local business owners, who have now received notices from the Pensions Regulator.

“Many have planned well in advance and have fully compliant pension schemes up and running already, but for those employers yet to comply with the new rules, they must act quickly.

“The Pensions Regulator is carrying out spot checks across the country and can impose a £400 fixed penalty, escalating to daily fines set at a minimum of £50 per day for non-compliance and the possibility of civil penalties and court action.”

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