The deadline is getting closer…
The National Employment Savings Trust (NEST) is due to launch in October 2012, little more than a year away. NEST is a Government-initiated default pension scheme, primarily aimed at low to medium earning employees who have no or very limited employer pension provision. NEST will be supported by auto-enrolment rules which, over the following three years, will place most tax-paying employees in the scheme if they are not enrolled in a suitable alternative pension arrangement offered by their employer.
In one form or another – the concept was originally called Personal Accounts – NEST has been in development for over five years. The first NEST framework legislation dates back to 2007. The auto-enrolment legislation followed in 2008, but research published early in 2011 revealed that only one in five businesses employing 250 or fewer employees had budgeted for the associated contribution costs.
If your business has not yet fully considered the impact of NEST and auto-enrolment, now is the time to start. While the long phasing in schedule means it could be the second half of 2015 before some small employers come within the ambit of NEST and auto-enrolment, your employees could well be asking questions much sooner.
Mini 1
If you prefer to complete your tax return on paper rather than file via the internet, have you remembered that the deadline of 31 October is approaching? This year HM Revenue & Customs has a new set of penalties for late filing which is much harsher than the predecessor. For example, if you are one day late with your return, the fine is £100, even if you have no tax to pay, whereas before no tax due meant no fine. After three months there is now an additional penalty of £10 a day.
Mini 2
Did you know that, in June, a small bank, Southsea Mortgage and Investment Company, was placed in administration by the Financial Services Authority (FSA)? It was the first such failure of a deposit-taking institution since the problems encountered by Dunfermline Building Society in 2009. The Financial Services Compensation Scheme’s new faster compensation payments system kicked in and the ‘vast majority’ of Southsea’s depositors received compensation the day after the FSA acted. On this occasion compensation was not unlimited – the new £85,000 ceiling introduced in December 2010 was applied. That change of approach is worth noting if you have large deposits with any one bank or building society.