The law on pensions has changed and even small businesses must now enrol employees in a workplace pension - a process known as 'auto-enrolment.

Larger businesses had to comply a few years ago but now the new laws apply to small businesses too. To encourage compliance, a schedule of fines has been put in place, to be paid daily. If you employ fewer than five staff it's £50 per day, for between five and 49 staff it's £500 per day.

But there are circumstances where businesses may be exempt so it's worth checking to see if they apply.

Businesses exempt from auto-enrolment

• Sole director companies with no other staff
• Companies comprised solely of directors, only one of whom (or none) has an employment contract
• Companies that have ceased trading, been liquidated, are dormant or dissolved

Note that if your company is comprised solely of directors but more than one of them has an employment contract, your company will not be exempt.

What's the next step?

If your company conforms to one or more of the criteria outlined above then you need to tell the government that you won't be enrolling any staff in workplace pensions.

To do this you need to have your employer's PAYE reference and company registration number (if applicable) to hand. You can inform the Pensions Regulator.

If the Pensions Regulator has written to you asking you to either confirm or opt-out, you'll need the code on that letter too.

Home staff

There's one other point that isn't directly relevant to small businesses but may affect business owners if they employ staff at home - housekeepers, personal assistants, nannies etc. There's an implication that, if you do employ such staff, you will have to provide workplace pensions for them.

The simple solution

Obviously, if you are exempt but your situation changes, perhaps because your company takes on staff, then you need to inform the regulator as soon as possible. You also need to set up those pensions and enrol your staff.

If you want to find out more about auto-enrolment and how it affects your business then contact us and we can help you access support. You can email This email address is being protected from spambots. You need JavaScript enabled to view it. or call 01623 490 120.