Number of small firms to auto enrol set to more than double in 2017
An estimated 801,000 small businesses are set to reach their staging date in 2017, more than doubling the number in the previous 12 months.
The Pensions Regulator (TPR) expects a maximum of 374,300 small employers to have enrolled during the whole of 2016.
A recent survey found more than half of small and micro businesses felt auto enrolment would be a burden and two fifths said it was unfair. But the data also found that 72 per cent of them said it wouldn’t get in the way of growth plans.
Will Wynne, co-founder and MD of Smart Pension said: “2017 is going to be a challenging year for hard-working small companies. We know initiatives like auto enrolment have a disproportionate effect on smaller firms, where the founder is often the boss, the FD, the HR manager, the works supervisor, the first aid officer – and everything in between.
“Next year is going to see dramatic step change, when almost a million small firms offer their employees an opportunity to save for their retirement for the first time – half a million more than in 2016. It will also mean pension providers need to be ready for the massive upturn in the number of inquiries from January onwards.”
TPR calculates that in total 1.46m small firms will need to set up auto enrolment schemes.
The increased regulation will also hit small businesses at the same time as the first wave of the Government’s Making Tax Digital initiative – which will see small firms having access to their own interactive digital tax accounts from April 2017, ready for mandatory reporting for the self-employed and micro firms from April 2018.
Will added: “The Government is pushing small business gradually towards ongoing digital accounting and payroll products. If small firms are looking at investing in new accounting software, it’s worth making sure it will be compatible with the system used by their workplace pension provider.”
According to research from the Institute of Chartered Accountants England and Wales (ICAEW), 75 per cent of businesses do not currently maintain their accounts using accounting software.
Source: http://www.bmmagazine.co.uk/