QuickBooks Community UK

What is Auto Enrolment?

The Government introduced a new law designed to help people save more for their retirement.

All employers, regardless of size, have to enroll their workers into a workplace pension scheme, if they are not already in one. Large companies have already implemented this.

The pension scheme has to be a “Qualified Pension Scheme”. This is not the same as occupational pension scheme but they may be suitable.

The Pension Regulator gives employers guidance on

How to select a pension provider

How to communicate to employees

How to complete the “ Declaration of Compliance”

Note: The “Declaration of Compliance” must be completed within 5 months of the Staging Date and is not affected by postponement
Auto Enrolment can be found in the Employees tab > Auto Enrolment

The setup wizard takes you through a 5 step wizard

1. Staging Date
2. Your Pension Provider
3. Configure Pension Scheme
4. Contact Info
5. Confirmation

The staging date is when you Auto Enrolment duties come into force and is based on the total number of people in your PAYE scheme. You can find your staging date on the Pension Regulator's website by entering your PAYE reference. Your PAYE reference can be found on a P6/P9 coding notice or your P30BC white payslip booklet.
Postponement can be used:

At the employer’s Staging Date for any existing workers

The first day of employment for any new starters after the staging date

The date a worker meets the criteria to be an eligible jobholder after the employer’s staging date

Postponement suspends the duty of assessment and automatic enrolment, but not all the employer duties.

Can be from 1 day up to max of 3 months – & can vary by individual

Only one postponement at a given time per worker, but can be used multiple times except

Cannot overlap two postponement periods

Jobholders have the right to Opt in or join during postponement

Communication – Postponement letter template is available for all employees

Communication letters can be located in Employee Details> Auto-Enrolment>Communications> Letter 6 for all workers, this letter details why auto enrolment is happening, when it affects the employee and what the employee needs to do.
In the Employer Settings>Pension Schemes> Pensions you can see more details about the pension

Pension Scheme Details

Membership

Contributions

Pensionable Items

Qualifying Earnings

Upon creating the pension you need to specify the settings for the pension, if you are unsure of the settings please contact your pension provider.

Pension Scheme Details:

Relief at Source : The contribution is taken after the deduction of tax & national insurance i.e. net pay. Tax relief at basic rate is claimed by the pension provider.

Net Based : The contribution is taken before it is taxed i.e. reduced taxable pay.

NOTE: Check with your pension provider which tax method they use (it will either be Relief at Source also known as RAS or Net Based also known as Net Pay Arrangement)

Use Thresholds : Auto enrolment thresholds, please see table below.

Membership: Details the employees who are included & not included in the pension scheme

Pensionable Items: Pensionable earnings are defined by the employer when they create a pension scheme. It is not always the same as Qualifying Earnings.

Qualifying Earnings: This can be used for two purposes

1. Assessments – to determine worker category/eligibility
2. Definition of pensionable earnings for a Qualifying Pension scheme

Qualifying earnings is defined as all of the following items paid to a work: