Running a business is a serious undertaking with demands on both time and money, so there will be a degree of empathy for the small and micro businesses that are about to hit their staging dates.
The cost burden firms are already facing is only going to grow, with Now: Pensions, who recently announced it would be introducing an auto-enrolment employer charge from next year and with other providers likely to follow.
It is clear that unless something is done, there will be a great deal of small firms who are going to be left out in the cold. These businesses are beyond the realms of supersized HR departments, and often beyond the scope of those who can help with firms’ auto-enrolment responsibilities, like accountants.
It is not just firms that stand to lose out by not getting on top of their auto-enrolment duties. We also have to consider those who fall outstide of the auto-enrolment rules, such as those who are just starting out in the world of work and those closer to leaving it.
There has been talk of operating a different model for small and micro businesses, where pension contributions would be collected through extra National Insurance payments, but the consensus seems to be that ship has sailed and we are too far along with auto-enrolment to be devising different approaches for the smaller business.
Another proposal is to remove the complications for employers by simply opting everyone in. No assessing, less messing around with payroll, auto-enrolment for all. This radical proposal will be unlikely to go down well with the employers who would have to pay for it.
The Government’s rationale for rolling out auto-enrolment was that people are not saving enough for their retirement. The project will be deemed a failure if all we have to show for it at the end of it is a number of smaller firms who have been fined, or at worst, gone bust as a result of non-compliance.