Get Your Workplace Pension in Gear
...for the New Tax Year
With the 2018/19 tax year shuddering to a halt on the 5th of April, it’s time to scan the road ahead and see what 2019/20’s going to bring. For one thing, if you’re putting people to work in your business, then the new tax year’s going to feature a bump to your workplace pension contributions.
The idea behind the workplace pension is to get people saving earlier and more consistently for their retirement. It kicked off back in 2012, and more or less flips the traditional government way of thinking on its head. Instead of struggling to convince people to save, it basically does it for them unless they specifically opt out. So far, the trick seems to be working, too. The workplace pension has already got 10 million people signed up, with only 1 in 10 going through the opt-out process.
So, here’s what it means for you. If your business takes on employees, you need to check if they qualify for the workplace pension scheme. In general, you’ll need to enrol them if they’re:
Every 3 years after you took on your first employee or set up your pension scheme, you’ll have to re-enrol your staff if they’ve either:
Any time you re-enrol someone, you’ve got to let them know within 6 weeks. Whether you re-enrol people or not, you’ll also need to fill in a “re-declaration of compliance” form to show you’re sticking to the rules. You’ll be fined if you don’t do this.
Re-enrolment is a 4-step process:
Now for the nuts and bolts of it. As an employer, you’ll be taking a small percentage of your employees “qualifying earnings” each month and paying it into their pension scheme. That could mean salaries, bonuses and commissions or even statutory payments like Maternity Pay. Your business will be topping those contributions up as well – and the rates are about to go up:
The contributions before the 6th of April look like this:
After the 6th of April, they’ll be:
Of course, there’s nothing stopping you from paying in more than the minimum employer’s contribution. If you do, then your employees won’t need to pay as much to meet the required total of 8%. Either way, if you’re with RIFT, we’ve got you covered.
What we’ll do:
As part of your RIFT Accounting package, we’ll update the pension contribution amounts on your payroll software and pension scheme account, keeping you in the taxman’s good books.
What you’ll need to do:
All you’ve got to do is contact your employees to let them know about the rise in their workplace pension contributions. There are some useful template letters on the People's Pension website you can use for this.
As always, RIFT is here to handle all your questions, worries and problems. Just get in touch and we’ll get to work.