According to the Centre for Economic and Business Research the cost to businesses of complying with the requirements of pension auto-enrolment will exceed £15.4 billion. Set-up costs for individual SME’s could exceed £25,000 and could take up to 103 man hours – time that could be better spent expanding the business. Unfortunately it doesn’t end there, the Pensions Regulator has the power to issue penalty notices for non-compliance which can rise to £10,000 per day (yes, you did read that correctly – per day). If you fail to pay over contributions that are due, the Pensions Regulator can issue civil penalties of up to £50,000 for corporations and £5,000 for individuals.
So if you are looking for flexibility from your workforce, then an umbrella company could be the answer.
Umbrella Companies are employers like any other, which means that we will also have to bear the burden of pension auto-enrolment. An umbrella company works as an intermediary, employing workers directly under a contract of employment whilst working under a business to business contract with a recruitment agency or other commercial organisation. The worker’s earnings are subject to income tax and National Insurance contributions, which are paid to HMRC by the umbrella company along with their contribution for Employer’s National Insurance.
Lisa Keeble is the Managing Director for Contractor Umbrella Ltd, one of the UK’s Most Respected Umbrella Companies and founder member of AllUmbrellaCompaniesAreEqual.
Learn more about Lisa on Google.