Auto-Enrolment Pension Scheme
Last updated on Thursday, October 2, 2014
Recent legislation regarding auto-enrolment into workplace pensions for employees has been brought in by the Government to encourage workers to put aside for their future. This legislation states that employer’s with workers that fall under the following criteria must automatically enrol them into a workplace pension scheme..
- If they are between 22 and the State Pension age
- If they earn more than £10,000* a year (in salary)
- If they work in the UK *which is subject to change
So what does this mean for Limited Company Contractors?
If you a Contractor running a one-person Limited Company and you are the only director and shareholder, you are exempt from this legislation as the work you are contracted for is generally referring to the service your Limited Company is providing, not yourself as an individual employee. On the other hand, if the Limited Company has additional employees you may be affected. This would include circumstances whereby a spouse and/or civil partner are employed through the Limited Company. They would of course have to fall under the criteria as previously mentioned and do always have the option to opt out of the scheme however, as the duty of being an employer, you would be required to auto-enrol them into a workplace pension scheme. For Limited Companies incorporated before 1st April 2012 and that have less than 30 employees this legislation could come into effect from January 2016 at the earliest however, any Limited Companies incorporated after this date could be affected from 1 May 2017.
For further information on this subject please contact our Personal Tax Team on 01707 871620 or request a call back.
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