PRACTICES HAVE SEEN COSTS “significantly increase” from tackling auto-enrolment – with many concerned that clients won’t meet compliance deadlines, according to a new Accountancy Age/Sage survey.
Some 61% of 180 practitioners questioned by Accountancy Age revealed their clients were either “not very” or “not at all” prepared for auto enrolment. Four in ten (39.4%) said their practice’s costs had “significantly increased” in preparing for auto enrolment, citing processing; staff and admin time; client preparation; and irrecoverable time providing advice as the main culprits.
The next year will see tens of thousands of employers (with fewer than 30 employees) reaching their staging date to enrol staff with a qualifying workplace pension scheme.
Only a half (57%) have implemented a pricing structure around AE implementation and advice.
“This confirms a value based pricing structure will be beneficial for accountants to ensure no chargeable time is lost,” said Sèan Kemple, VP of Sage’s Accountants’ Division. “Auto enrolment is a top priority for Sage and we will continue to support our accountants through the process.”
While eight out of ten firms (83.5%) said they were confident with their own preparations to deal with AE, they also highlighted a range of problems they are facing.
Pension provider wobbles
Nearly half lack confidence in selecting a pensions provider for their clients, with one in ten unsure about hitting their own schedule to manage AE on clients’ behalf.
Seven in ten (72.3%) are worried about clients being fined by the Pensions Regulator.
“It’s vital that the UK’s practice community considers its communication with clients. Practitioners must also discuss the auto-enrolment implications with their software and payroll providers. We want accountants to have efficient and reliable processes in place that illustrate their value – while providing certainty to their clients,” Kemple added.
Kevin Reed, Accountancy Age’s consulting editor, said that AE was another in a “long line” of compliance burdens that practices must learn to embrace, rather than suffer.
“We have Making Tax Digital around the corner, auto enrolment is here now – both of which follow on from real-time PAYE reporting. Governments will continue to use digitalisation to drive compliance and efficiencies,” said Reed. “While it’s not easy, practices must try and get ahead of the curve; to be agile, automate and then leverage this change to provide value-added services.”
One in nine (13%) uses a payroll software provider that doesn’t include a pension module or an add-on.
‘Months’ of planning for practices
Many practices (46.3%) said it would take them at least a few months to deal with auto enrolment. “It was interesting to see [this stat], with certain Pension modules fully automating the process, accountants can save themselves hours of chargeable time,” added Kemple.
The Accountancy Age audience survey was undertaken during September 2016. Of the respondents, 27.4% were from small practices (1-10 employees), 18.5% were sole traders and 12.5% were from medium-sized practices (11-50 employees).
Signed into law by president Barack Obama in 2010, the Dodd-Frank legislation has tightened regulation of the US financial system
Richard White, Nicola Westbrooke and Richard Ross all join from KPMG, where they oversaw the real estate tax practice
Sheryl Davis joins the firm's High Wycombe office from Barnes Roffe
Stephen Franklyn of Lithium Systems discusses why accountancy firms should prioritise cyber security and how they can take steps to protect both data and their reputation