How to reduce potential costs of auto-enrolment? Top 5 ways

Taxpayers with small tax bills can secure a cash flow advantage by filina The Centre for Economics and Business Research (CEBR) in its analysis of a report entitled “Finding your way out of the auto enrolment maze” estimates an average set-up cost of £8,900 for a small business, ie, those with 1 to 4 employees. While SMEs with up to 100 employees will have to spend an estimated £12,600, businesses with up to 250 staff will have to bear an estimated cost of £15,600, and those with up to 500 employees could spend as much as £22,300 to be in line with the new legislation. In addition to the warning about cost, the report went on to alert British businesses to brace up for arduous paperwork, bureaucracy as well as the necessity to complete an average of 33 administrative tasks to get in line with the new regulations. With regards to duration of time, the report said it will take some businesses up to 103 working days to implement! And that is not the end of it. Long after you’ve finished filling the first forms that got your auto-enrolment scheme in place, you will be required to spend considerable time each month to keep up with recurring administrative burden. However, don’t be alarmed. From a finance professional’s standpoint these numbers seem like estimates based on assumptions that businesses will use the same techniques to adapt to their new duties as they did while purchasing employee benefits in the past (for a more customised “true” cost for your business, either get professional help or visit The Pensions Regulator’s website as they have published a lot of guidance around auto-enrolment). Having said that, auto-enrolment will definitely bring additional costs whether they come from employer contributions, change in payroll systems, or the time, money and resources needed to communicate with staff and maintain appropriate employee records. g early. However, the option is only available to those in PAYE employment who earned additional income during the year on which they owe tax. If the tax owed is less than £3000 you can request HMRC to calculate whether the underpaid tax can be taken from your salary or pension in equal instalments. As per HMRC five thousand taxpayers qualified last year but failed to file in time.