Auto Enrolment non-compliance – when is a reasonable excuse not a reasonable excuse?

Once a quarter, The Pensions Regulator (TPR) releases the snappily titled 'Compliance and Enforcement Bulletin'.  Although no-one would describe this…

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auto enrolment non-compliance

Once a quarter, The Pensions Regulator (TPR) releases the snappily titled ‘Compliance and Enforcement Bulletin’.  Although no-one would describe this as a real ‘page turner’, it does contain some useful information for small and medium sized businesses. And since most small and micro employers have now reached, or are rapidly approaching, their staging dates, we thought it might be useful to reference the latest edition.  In particular, what does (or perhaps more importantly, what does not) constitute a reasonable excuse for auto enrolment non-compliance.


To quote TPR:

“This period, we issued 3,728 Fixed Penalty Notices to employers for failing to meet their automatic enrolment duties. After asking us to review our decision, a number of them contested their fines at a tribunal, claiming that their non-compliance was unintentional and that they had a ‘reasonable excuse’. The circumstances that employers are citing in their defence include confusion between the employer and the payroll administrator as to who is supposed to be doing what, illness, and being short-staffed. However, as the case studies illustrate, in the eyes of the law, these reasons are not sufficient to avoid a fine.

The idea of a reasonable excuse is also used by HM Revenue & Customs (HMRC) for appeals against tax penalties, but the tribunal has made it clear that the two regimes are separate. The same basic principle applies, in that a reasonable excuse is something unexpected or outside your control that stopped you meeting your statutory duties. But because the automatic enrolment and tax duties are different, something that amounts to a reasonable excuse for HMRC’s purposes may not be enough to avoid an automatic enrolment fine.

For example, HMRC guidance says that a problem with their online service is a reasonable excuse for failing to file a tax return on time. However, the tribunal has rejected it as an excuse for failing to complete a declaration of compliance, because we offer an alternative telephone service, and also because of the number of reminders that we give employers to complete their declaration in good time.

The following do not amount to a reasonable excuse, whether for a failure to file a tax return or a failure to complete the declaration of compliance: „


Auto enrolment non-compliance

TPR has made it quite clear that as far as auto enrolment non-compliance is concerned, it feels that its approach of “educating and enabling before enforcement is both effective and proportionate.” To be fair, this is demonstrated by the fact that less than 5% of cases progress from a Compliance Notice to an Escalating Penalty Notice. But if you think that you can ignore your AE responsibilities and they will simply go away, think again.

The full report can be read on TPR’s website HERE


Auto Enrolment done for £250.00!


Benchmark Software offer a complete AE / Workplace Pension Service and can manage the entire process for you for just £250.  From assessing your workforce and setting up your pension scheme to doing your Declaration of Compliance.  Leaving you to get on with running your business.  (And not worrying about auto enrolment non-compliance). For more information CLICK HERE or contact us on 01458 444010