You may or may not have heard recently that the UK government are revising work place pension schemes - causing a lot of confusion for all employers and self employed businesses.
HMRC have revised the pension scheme by introducing a new pension initiative called 'automatic enrolment'.
It will need to be set up by the employer as they look to make sure people have a pension for the future; with the uncertainty of the state pension, this is a way that forces employers to pay into employees pensions.
The new 'automatic enrolment' covers anyone who works in the UK, earns £10,000 or more per year, and if they are between 22 and the state pension age.
Whereas, if you are self employed, by law there is no requirement to enrol. However, while the 'automatic enrolment' has no direct impact on the self employed it is still advised to think about the future and enrol into one of the many pension schemes available to you.
Some of the many options available to self employed are; a personal pension, self invested person pension, or a stakeholders pension. While these are all private pensions, the self employed still have an option to enrol into the National Employment Savings trust who are a government body.
As the director of a company, you are required to register for automatic enrolment; however, you can opt out of paying towards the pension scheme. A director of a company is seen to not hold a contract so they are not classed as employees, which means they are not required to be enrolled.
Although, it is advised that you do have a pension and when thinking about setting up a pension ensure you have enough to survive in the future. When making payments you should look at your income to see how much you can afford after subtracting living expenses.
If you have further questions, get in touch with a reputable accountant who can advise your further like Tax Affinity Accountants, the experts in Tax and Accounting.
By Chris Combstock at Tax Affinity Accountants
Tax Affinity Accountants are experts in Tax and Accountancy. Based in Worcester Park and Surbiton they are considered in the Industry to be experts accountants for small businesses. Helping and supporting business throughout the UK, they regularly help new and established businesses to succeed.
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