DMS Posts

Another change to workplace pensions

Pensions auto-enrolment was phased in slowly, but now every employer must join their eligible staff in a workplace pension unless they opt out. But there’s one last important change before the task is complete. What is it?

Auto-enrolment recap

It’s been a long haul but since early 2018 every employer has had to include eligible staff in a workplace pension scheme and pay into it. That’s the basics of auto-enrolment (AE). To be eligible for inclusion in your firm’s scheme your workers must be between 22 and state pension age and earn more than £192 per week. Once auto-enrolled a minimum contribution must be paid and this is about to take a significant hike.

Employer’s responsibility

The last step of the AE bedding-in process occurs in April 2019, when the minimum contribution rates reach their final level. Making sure the increase is correctly put into effect is your responsibility as an employer and The Pensions Regulator (TPR) can fine you if you get it wrong.

How much?

From 6 April 2019 the minimum total pension contribution rises from 5% to 8% of employees’ earnings – not all earnings necessarily have to be subject to AE (see The next step ). Of this you must pay 3% (up from 2%) and your workers must pay the difference between your contributions and the 8% (or higher figure) or tell you in writing that they don’t want to be included in your pension scheme.

Higher contributions. The actual rate of contributions is decided by your workplace pension policy/contract. This may require you or your employees to pay more than the minimum AE rate. If your policy doesn’t cover the contributions which apply from April 2019, you’ll need to change the policy so that it’s compliant.

Tip. Contact your pension company, financial advisor or scheme administrator about this without delay.

Keeping workers informed

It’s best practice to notify your workers of the new AE rates and now’s the time to do it.

Tip. TPR produces a template letter you can use to send to staff to tell them the contributions are going up. You can adapt it to meet your needs. TPR also provides a helpful flow chart of what steps you need to take in readiness for April (see The next step ).

Dos and don’ts – AE safeguards

As an employer, you have AE safeguarding duties. Not only are there things you must do to comply with AE, there are things you mustn’t. For example, staff may not be happy about the higher AE rates and may be entitled to reduce their contributions below the minimum AE rate rather than drop out of the pension scheme altogether. AE would cease to apply to them or you. Consequently, subject to your pension policy/contract you could reduce your contributions and save some cash.

However, you must be careful that it doesn’t look as if you’re encouraging your staff to drop out. TPR will see this as a breach of the safeguarding rules and hit you with a stiff fine.

Related documents – The Next Step


EU Exit – Update from HMRC

Dear colleague,

The UK will be leaving the EU on 29 M‌ar‌c‌h 2019. Leaving the EU with a deal remains the Government’s top priority, however the government and businesses should continue to plan for every possible outcome including no deal.

In December, HMRC wrote to VAT-registered businesses that trade only with the EU advising them to take 3 actions to prepare for a no deal EU Exit, including registering for an UK Economic Operator Registration and Identification (EORI) number. You can read the full letter here.

Businesses that only trade with the EU will need an EORI number:

  • to continue to import or export goods with the EU after 29 M‌ar‌c‌h 2019, if the UK leaves the EU without a deal; and
  • before they can apply for authorisations that will make customs processes easier.

If you are a UK business that trades with the EU and do not already have an EORI number then you should register for an EORI number at GOV.UK now. It only takes 10 minutes to apply. These businesses should also decide if they want to hire an agent to make import and/or export declarations for them or make the declarations themselves.

Businesses can find further guidance on customs declarations at Declaring your goods at customs if the UK leaves the EU with no deal. We have also published a new ‘Prepare your business for the UK leaving the EU’ tool on GOV‌.UK to help businesses with their EU Exit preparations that provides further support and guidance at Prepare your business for the UK leaving the EU.

We will continue to support businesses in their preparations for leaving the EU, including registering for an EORI number, as the 29 M‌ar‌c‌h 2019 approaches.

Kind regards,


Jim Harra

Deputy CEO and Second Permanent Secretary – HMRC

DMS Posts

Deadline for submitting your 2017/18 self assessment return

Deadline for submitting your 2017/18 self assessment return (£100 automatic penalty if your return is late) and the balance of your 2017/18 liability together with the first payment on account for 2018/19 are also due

This deadline is relevant to individuals who need to complete a self assessment tax return and make direct payments to HMRC in respect of their income tax, Classes 2 and 4 NI, capital gains tax and High Income Child Benefit Charge liabilities.

There is a penalty of £100 if your return is not submitted on time, even if there is no tax due or your return shows that you are due a tax refund.

The balance of any outstanding income tax, Classes 2 and 4 NI, capital gains tax and High Income Child Benefit Charge for the year ended 5th April 2018 is due for payment by 31st January 2019. Where the payment is made late interest will be charged.

The first payment on account for 2018/19 in respect of income tax and any Class 4 NI or High Income Child Benefit Charge is also due for payment by 31st January 2019.