Auto-enrolment – the staging date for micro-employers arrives
Over the course of the next 22 months, starting from 1 June 2015, those employing less than 30 employees, including those who employ just one will reach their “staging date” – the date when the employer duty to auto-enrol first applies. This explains the recent flurry of media coverage that has focussed on households that employ nannies, carers and the like.
The actual staging date will depend on the last two digits of the employer’s PAYE reference – so for some micro-employers the duty will have already arrived, whilst for others it is still some time off (some commentators have noted this as being a “lottery” with potentially up to nearly two years between staging dates of otherwise identical employers). And even when the staging date has arrived it may well be that the employees are not eligible because their earnings are below the “earnings trigger” (£10,000 pa in 2015/16), or are too young (below age 22).
Nevertheless, 1 June 2015 is a wake-up call for the smallest of employers who have either neglected or were not aware of their duties under legislation that has been on the statute book for many years.
Regulator issues a £382,000 contribution notice against just one individual
The Pensions Regulator has issued a £382,000 contribution notice against an individual who benefitted from the disposal of businesses upon which a pension guarantee had existed. The Regulator says that this points to its willingness to pursue individuals and even overseas targets as further evidence of its determination to use its anti-avoidance powers to protect pension scheme members’ interests.
Richard Williams, sole director and shareholder of a shell company named Gillico Limited, personally received a purported working capital adjustment of £382,136, net of legal fees, when, in 2010, Gillico bought Carrington Wire Limited for £1 from two Russian businesses (collectively Severstal).
Severstal had bought Carrington Wire in 2006, providing a guarantee to its pension scheme, but which would fall away should Severstal cease to be associated with Carrington Wire.
In 2012 both Severstal and Mr Williams were issued with warning notices that the Regulator was likely to impose contribution notices – for £17.7m in Severstal’s case and the above sum in Mr William’s. Severstal eventually agreed to pay £8.5m in settlement of its pension commitment and this was received by the Carrington Wire scheme in January 2015.
Neither this settlement nor the contribution notice being issued against Mr Williams will, in themselves, be sufficient to prevent the pension scheme from having to enter the PPF.
Further details of this case are set out in a section 89 report. The Regulator has also published the Determination Notice in relation to Mr Williams.
This Pensions Bulletin does not constitute advice, nor should it be taken as an authoritative statement of the law. For further help, please contact David Everett at our London office or the partner who normally advises you.
