THE FIRST THING accountants should be clear about when approached by an employer is what and when their staging date is. The staging date is the date set in law and is when an employer’s legal duty to implement automatic enrolment comes into force.
The staging date is based on the number of persons in an employer’s largest PAYE scheme. This number is based on the information held by the regulator from HMRC at 1 April 2012 and not on current staff numbers. Those employers with less than 50 workers in their PAYE schemes will reach their staging date between 1 June 2015 and 1 April 2017.
An employer who first pays PAYE in respect of a worker from 1 April 2012 up to and including 30 September 2017 will have a staging date between 1 May 2017 and 1 February 2018. The staging dates is not based on the number of persons in the employer’s largest PAYE scheme but by the date the employer first pays PAYE in respect of any worker.
Employers only have one staging date
Each employer has only one staging date, however, some employers are part of a complex corporate or group structure and this may affect their staging date. The Pensions Regulator recommends employers in these structures consult the detailed guidance (link) for further information.
For most employers, using the regulator’s staging date tool is the easiest and quickest way to find out www.tpr.gov.uk/employers/tools/staging-date.aspx If an employer has more than one PAYE then the earliest date will apply.
Twelve months before their staging date, the regulator will write to employers prompting them to take action. Employers can nominate a secondary contact for the regulator to write and email and this could be their accountant.
Postponement doesn’t change the staging date
Postponement does not change the staging date but delays the requirement to assess workers. On the last day of the postponement period, which is a maximum of three months, the employer must assess the worker and determine which workers need to be automatically enrolled. However, an employer may wish to tackle this in advance as it could take some time depending on the number of workers and the type of workforce.
The first task for an employer is to carry out a quick check of their workers
Employers will need to carry out an initial assessment of their workforce. This is to see if they are likely to have any workers on their staging date who are old enough and earn enough to be automatically enrolled. Employers who already provide a pension scheme for their workers will need to decide whether they want to use this scheme to meet their duties for existing members. The regulator recommends an employer without pension provision should have a scheme in place by their staging date. Employers with payroll providers should also check the provider can help them and test their systems in advance to ensure there are no last minute glitches.
An employer should have a scheme in place from the staging date
Having completed the initial assessment of their workforce, an employer will know whether they are likely to have an automatic enrolment duty. If so, they will need an appropriate scheme to fulfil their duty. The Pensions Regulator recommends employers have a pension scheme in place six months before the staging date to ensure they are ready on time. Employers should check to ensure any existing arrangements can be used to meet the employer duties from the staging date which may involve checking with the pension scheme provider, adjusting entry and contribution requirements.
Staging dates can be pushed back, but this is the exception and not the rule
Normally it is not possible to move an employers’ staging date to a later date, however for employers with fewer than 50 workers on 1 April 2012 it may be possible to select a modified staging date based upon a table shown on TPR’s website. http://thepensionsregulator.gov.uk/employers/exceptions.aspx#modif
Staging dates can be brought forward but not subsequently pushed back if time runs out
The employer may choose one of the earlier staging dates, which can be found here http://www.thepensionsregulator.gov.uk/employers/bringing-your-staging-date-forward.aspx but the employer will need to check with the pension scheme provider that they agree to the scheme being used from an earlier date. Employers should also check with their payroll provider that they can accommodate this as well. The employer must also advise the regulator that they are bringing their staging date forward giving at least one calendar month’s notice. Once an employer’s staging date has changed it cannot be put back to the original date.
Using different PAYE reference will not change the staging date
Using a different PAYE will not change the staging date. Even a change of ownership would not change this. However, where the employer has no workers on the staging date then the employer duties will not apply. Any employers who share a single PAYE scheme with other employers will all have the same staging date, determined by their PAYE scheme. An employer who uses multiple PAYE schemes will have a staging date determined by the largest PAYE scheme. This will be the case even if the majority of the employer’s workers are not in that PAYE scheme.
Please visit The Pensions Regulator website for more information on staging dates. Next month we will be covering issues around assessing the workforce
The Financial Reporting Council has launched an investigation into the conduct of the Big Four firm in relation to its audit of BHS
The FRC says it best when it says nothing at all
Head of editorial Kevin Reed discusses the result of the EU referendum, and explores it means for accountants
What questions should the profession be asking now the UK has decided to leave the EU?