How to ensure your clients meet auto enrolment challenges

Navin Thaker is an audit partner at HW Fisher & Company. He is responsible for overseeing the payroll department, which looks after auto enrolment pensions for the accountancy firm’s clients.

What are the main challenges facing businesses when it comes to auto enrolment?

For small firms in particular, there is a tendency to leave it too late, perhaps because they don’t know where to start. Typically, a letter arrives from HMRC or the Pensions Regulator and they think, “this looks horrendous – I’ll deal with it later.”

The problem is some businesses only get around to taking action shortly before their staging date.
Another thing companies don’t realise is that if you don’t comply, there are heavy penalties. Thousands of pounds in fines have already been levied by the Pensions Regulator on firms which have not staged on their due dates.

What can accountants do to encourage their clients to act?

The Pensions Regulator publishes a table of fines, and we’ve found this works as a good deterrent if included in material we send to clients. For example, if you have up to four employees, the daily rate of fines is £50 – so if you leave it for three months, you’re in big trouble. There are some cases where companies have been fined £30,000.

We can also find out a company’s staging date online and write to our clients to ensure they take action. But small firms often don’t realise that we can only run auto enrolment for you after you have chosen a pension provider. Only a regulated person can advise which scheme to choose. We do have
those advisors in our office but they charge separately for it – which can be quite expensive for a small business.

What other challenges do accountants face in getting clients to take up their auto enrolment services?

We have found that, among small businesses in particular, they expect this to be part of the payroll service. In fact, this process is not straightforward, because nothing with government computerised schemes ever is.

This is quite a costly burden that the government has placed on employers, but we try to minimise the pain. Smaller clients often don’t understand how much work is involved in running an auto enrolment system. Accountants must communicate how detailed this work is. We explain how much is involved through our newsletters or media, or directly through a manager. For example, if I were with a client, I would set out what hoops we have to jump through.

Does auto enrolment present accountants with a significant business opportunity?

It does, although clients don’t appreciate how much work is involved. Company bosses pay us for our work, but they pay grudgingly. This is certainly not easy money – this is a serious business.

There is great responsibility, and fines if you don’t comply. But once you get the message across and when clients – especially smaller ones – realise how important this issue is, there are definitely opportunities out there…