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:
- You relied on someone else and they let you down
- You found the online system too difficult to use
- You didn’t get a reminder
- You made a mistake
- You or a member of staff were ill.”
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
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