Auto-Enrolling Pension

[geoffb]

Ok - Have I read this right

My wife and I are company directors of our own company
I don't receive a wage only dividends
My wife receives a monthly wage of £840 - and the rest in dividends

Neither of us have an employment contract

from the pensions regulator

We're a husband and wife company - do automatic enrolment duties apply to us?
If no one else is working for the company, it will depend on your roles and if you have employment contracts, as to whether you have automatic enrolment duties or not. You can find more information about employment contracts on the employment status section of the GOV.UK website.

If you are both directors:

• The company will have automatic enrolment duties for both of you if both of you have employment contracts.
• The company won’t have any automatic enrolment duties if only one of you has an employment contract, or neither of you has.
• If the company does have automatic enrolment duties for anyone, what you need to do will depend on their age and earnings. For more information, go to check who you need to enrol.
  
  If you believe you don’t have automatic enrolment duties you will need to inform us in writing.

Therefore because neither of us has a contract of employment - we don't have any automatic enrolment duties

Correct ?

 

[Sarah from LoatesHR]

Hi Geoff

I also asked this questions for my Ltd Company where my partner is a Director of the business but does not have a contract of employment. My understanding is that the answer you have given is correct. You can always give the Pensions Regulator a call to double check. Kind regards Sarah

 

[Newchodge]

I think this is a lot more complicated than it appears.

An employment contract does not have to be in writing.

A director is an office holder when carrying out the duties of a director, but may also be an employee under an employment contract if carrying out the duties of an employee.

Whether a director is also an employee is a question of fact, not choice.

The standard rule of thumb - person is a director and has no written employment contract may not be correct in determining if someone is an employee.

This will also be important next year for Employer's NI Allowance.

 

[geoffb]

According to Gov.uk

3. Employee
An employee is someone who works under an employment contract.

6. Director
Company directors run limited companies on behalf of shareholders.

Directors have different rights and responsibilities from employees, and are classed as office holders for tax and National Insurance contributionpurposes.

If a person does other work that’s not related to being a director, they may have an employment contract and get employment rights.

7. Office holder
A person who’s been appointed to a position by a company or organisation but doesn’t have a contract or receive regular payment may be an office holder. This includes:

• statutory appointments, eg registered company directors or secretaries, board members of statutory bodies, or crown appointments
• appointments under the internal constitution of an organisation, eg club treasurers or trade union secretaries
• appointments under a trust deed, eg trustees
• ecclesiastical appointment, eg members of the clergy

Office holders are neither employees nor workers. However, it’s possible for someone to be an office holder and an employee if they have an employment contract with the same company or organisation that meets the criteria foremployees.

Working out employment status for an office holder
Someone is likely to be an office holder if most of these statements apply to them:

• there is no contract or service agreement relating to their appointment
• their duties are minimal, and are only those required under the relevant statute, constitution or trust deed
• they don’t get a salary or any other form of regular payment for their services
• the only payment they get is a voluntary payment (honorarium), regardless of the work they do - tax and National Insurance are deducted by the appointing body
• they’re effectively working as an independent office, and are not under the close supervision or control of the appointing body

Clear As Mud !!!!

So am I an employee is the $64000 question

I don't have a contract, nor do I get holiday, sickness, or any other of the perks that 'employees' get

 

[kelvin1950]

If you do find the definitive answer, please post it here. My partner and I are in exactly the same situation.

 

[sjbeale]

If you are both directors and don't have an employment contract then you may be exempt. You should write to the Pension Regulator and explain this justification if you have received a letter from them. You will then get a written response. Keep all this correspondence in case you are investigated in future.

 

[David Griffiths]

Writing to The Pension Regulator will not work - they no longer accept these notifications by letter or by email.

You have to visit their website and provide the necessary information, including the reference from the letter that they sent

 

[sjbeale]

The Pension Regulator will still accept letters and will write back giving their verdict on the situation.

 

[David Griffiths]

Perhaps they will correspond on status, but they say that they won't accept letters to accept notification that there are no employer duties.

""Dear XXXXXXX

Thank you for your email dated the xx August 2015.

For individuals who are no longer an employer for the purposes of automatic enrolment, i.e. ceased trading or employers who are ‘director only’ companies, there is now an automated deactivation form which will require certain pieces of information to be provided. Upon submission of the required information, our records will be automatically updated and a confirmation email will be issued.

With this in mind, please can we ask that you provide us the details of exempt employers via our website – the form can be found here; https://automation.thepensionsregulator.gov.uk/notanemployer.

Please note that exemptions via email and letter notifications will no longer be processed.

If you have any further questions, please contact us.

Regards
xxxxxx
Customer Support Adviser
Automatic Enrolment"

As sent to my client last Monday

 

[Turner&Turner Chartered]

As an employer, if you have one or more employees it is your responsibility to enrol your employees into a pension scheme, if both individuals are directors you could possibly be exempt from this rule. You can contact the pension regulator and they should respond to your query if you are unsure. Turner & Turner Chartered Accountants Preston

 

[gwokka]

has the government changed its stance on auto-enrolment, in the sense that as long as your employees are not eligible and don't want to join a scheme you don't have to set one up. the reason I ask this is I went on pension regulators website yesterday and clicked on duties check
which leads you through the process of auto enrolment. When i get to the page that states what i (I would paste link but I'm not allowed to)need to do and by when it tells me i need to write to my employees on my staging date and then within 5 months of my staging date i have to fill in declaration of compliance, but no need to set up pension scheme. Have they changed the rules recently as i was under the impression that you had to have a scheme in place even if you had no staff eligble or wishing to join. I've even gone as far as filling in my declaration(albeit I cant submit it yet) and again it seems I don't need a scheme in place if no eligible workers.