Auto enrolment exemptions

Have you received  letters from The Pension Regulator (TPR) telling you to “ACT NOW” to prepare for auto enrolment? An initial letter asks you to nominate a contact to receive communications about auto enrolment, a second one will be asking for details about your chosen scheme.  There will also be threats of fines or prosecution if you don’t take action.

The “staging date” for your business will be stated in the letter which is  the date by which you must have a pension scheme ready for your employees to join.  However, not every business will need a scheme.

A large number of small companies will be exempt from auto enrolment, if they don’t technically have any “workers” at their staging date. A company director is not a “worker” if he or she does not have a contract of employment with the company. A company with no staff other than directors has no obligations under auto enrolment if any of the following apply:

  • It has only one director; or
  • It has a number of directors, but none of those have an employment contract; or
  • It has a number of directors, only one of whom has an employment contract.

TPR doesn’t know which directors in which small companies have employment contracts.

If you are satisfied that your company meets the exemption provisions then The Pension Regulator does need to be advised.  This can be done direct on The Pension Regulator website

You’ll need your letter code , PAYE reference  and Companies House number  You can re-request the letter code if you have lost it by following the link and entering the PAYE  and Accounts office references.

Liric will be contacting all our clients whom we think are eligible for this exemption.

If your company does have staff other than its directors, we should talk about what preparations you need to make to get ready for auto enrolment.