Auto-enrolment: Penalties for Non-compliance

New figures from the Pensions Regulator show that the number of penalty notices issued to employers who have not complied with their auto-enrolment duties increased sharply in the first quarter of 2015.

The Regulator’s latest compliance and enforcement bulletin reports that between 1 January and 31 March 2015, 198 fixed penalty notices were issued. Section 40 of the Pensions Act 2008 (PA 2008) allows the Regulator to issue a fixed £400 penalty notice following an employer’s failure to comply with a specific aspect of the auto-enrolment duties or an earlier statutory notice such as an unpaid contributions or compliance notice. Over the period since July 2012, 367 fixed penalty notices have been issued.

The Regulator can levy escalating penalties where a failure identified in a fixed penalty notice has not been remedied. Escalating penalties may be set at a rate between £50 and £10,000 a day depending on the number of employees in an employer’s PAYE scheme. No further details have been given about the precise daily penalties specified in the four instances concerned.

The Regulator continued to issue other types of statutory notice in the first quarter of 2015, including nine unpaid contributions notices issued under section 37 of the PA 2008. The additional nine notices bring the overall number of unpaid contributions notices issued since July 2012 to 17. The quarter also saw a further 15 information notices being issued under section 72 of the PA 2008, requiring employers to provide information or documents. Overall, 31 such notices have been issued to date.

The simple message? Employers should comply with their auto-enrolment duties to avoid costly penalties.

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