Do I need to bother about automatic enrolment?

I am a really, really small business. Do I need to bother about automatic enrolment? Whilst no business is exempt from workplace pension obligation based on size, you may have nothing or little to do depending on how your business is constructed.

Why you may need to bother about automatic enrolment

  1. Directors who do not have contracts of employment do not need to be enrolled
  2. If a director does have a contract of employment, they are not classed as a worker if they are the only person in the company with an employment contract.
  3. If a director has a contract of employment and is not the only person working for the company under an employment contract, they are not exempt. However,
  4. Depending on their age and earnings, they may qualify for automatic enrolment and the company will have the option to put them into a pension.
  5. If the company chooses not to automatically enrol a director who is or becomes eligible for automatic enrolment the director will retain the right to opt in or join a pension.

In other words, the company can decide whether to include directors in the assessment process. If it chooses to exclude them, individual directors can still elect to be included. Their individual employment rights cannot be removed from them.

Checking your automatic enrolment circumstances

The Government has provided a free online service for employers and individuals to check there circumstance.

In circumstances 1 and 2, the company can complete a ‘not an employer declaration’. This is for businesses who may no longer employ any staff, you have ceased trading, or you’re the director of a company with no other employees.

Complete a ‘not an employer declaration’.

In circumstances 3-5, a declaration of compliance needs to be completed post-staging in order to let The Pensions Regulator know how employers have met their legal duties for automatic enrolment.

Be sure to have your Government Gateway User ID, the employer’s letter code and the employer’s PAYE reference when completing this declaration of compliance.

Complete a declaration of compliance

Sadly, there are no exemption for ‘husband and wife’ businesses as there are no allowances for family relationships.

What is automatic enrolment?

Automatic enrolment makes it compulsory for employers to offer and automatically enrol eligible workers a workplace pension with employers expected to make minimum contributions to the scheme.

More information is on automatic enrolment is available from the Pensions Advisory Service.

For more information on how the above changes to automatic enrolment might impact you and your company please contact Menzies specialist Employee Benefits Advisory team who are part of Menzies Wealth Management

Menzies Wealth Management
Lynton House
7-12 Tavistock Square

Telephone: +44 (0)20 7387 5868 | Email:

How to leave feedback or make a complaint about Menzies Wealth Management.

Menzies Wealth Management Ltd is authorised and regulated by the Financial Conduct Authority. FRN: 486548.

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