If your business employs staff then after 30th September 2018 you will be faced with up to an extra 3% on your wage bill. Auto-enrolment is something that all employers will need to embrace very soon if they haven’t had to already.
Every employer will have to contribute to their employee’s pension funds from of around 2% of each employee’s wages who earn above £833.33 per month. This will increase to up to 5% but not lower than 2% from 1st October 2017 and then from 30th September 2018 it will rise to 8% with a minimum of 3% payable.
It’s not all doom and gloom though as there is a tax break that employers can take advantage of by simply ask you employees whether they would consider a salary sacrifice arrangement. This basically means that the employer will cover the employee’s pension payments in exchange of a salary reduction for the same amount.
It’s an equal swap and there is no net cost, just PAYE and National Insurance savings for the employer and employees alike. The good news too is that HMRC are completely happy for employers to use salary sacrifice schemes. Employees will need to have volunteer for these schemes and it is obviously the duty of the employer to make sure that full explanation is given to their employees
If you need help with your auto-enrolment or have any general bookkeeping questions then please get in touch by calling us on 020 8087 1341 or email info@cainandbeer.co.uk
