Pension auto-enrolment is slowly becoming a reality for the UK’s smallest companies, with the vast majority of small businesses required to be operating pension schemes by early 2017, and every business in the country required to be auto-enrolled by early 2018.
Unlike large or medium-sized businesses with hundreds of employees, freelancers, contractors and micro-businesses may be exempt from pension auto-enrolment. If your company has employees – even one – you are legally required to operate a pension scheme. However, if your business is comprised only of directors you are not legally required to operate a scheme. Many director-only micro-businesses already operate private pension schemes which may not meet auto-enrolment criteria, so declaring your company exempt will make sure you have no bureaucratic hoops to jump through, and can continue your pension contributions as normal. However The Pension Regulator will not know you are exempt – so they need to be told!
To opt-out you must inform the Pension Regulator that your company is exempt by emailing firstname.lastname@example.org using the following template:
1. I confirm that My Limited Company Name is a not an employer for the purposes of automatic enrolment for the following reason – (select one option from the list below):
a) There is only one director and there are no other staff working for the company
b) The only people working for the company are directors and none of them has an employment contract
c) The only people working for the company are directors and only one of them has an employment contract
d) The company has ceased trading (including date ceased)
e) (if there is some other reason why you believe you do not have any automatic enrolment duties, please provide a brief explanation)
2. The letter code for the company is: The letter code is a 10 digit number which can be found on all letters sent from The Pensions Regulator
3. The PAYE scheme(s) reference is: XXX/XXXXXXX
4. The companies house number (where applicable): XXXXX
5. The name, email address, address and telephone number of contact at the company.
If you have any queries please do not hesitate to get in contact.
The Pension Regulator should then confirm your exemption, and you’re all set!