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Don’t risk your credit rating by ignoring auto-enrolment fines

10 February 2017

Employers who ignore their auto-enrolment duties could end up with auto-enrolment fines as well as a bad credit rating after being handed a County Court Judgement (CCJ).

A small number of companies have been handed CCJs after failing to pay their automatic enrolment fines.

This can happen when employers persistently ignore penalty notices sent to them by The Pensions Regulator. Employers failing to pay within 30 days of receiving the CCJ, will have the details entered on their credit record. This means they will find it difficult to borrow money to invest in their business.

The report has the example of a removals firm who took two years to comply with their automatic enrolment duties. This was despite receiving two Fixed Penalty Notices (FPNs) and an Escalating Penalty Notice (EPN). It was only when TPR applied for a CCJ that the employer became compliant and paid their fines.

Charles Counsell, Automatic Enrolment Executive Director has commented.

He said, “A CCJ goes onto an employer’s credit record for six years, affecting their ability to get business loans.

“Burying your head in the sand and ignoring your legal duties means your staff are missing out on pensions they are entitled to. And also your credit rating and reputation could be hit.”

Between October and December 2,919 £400 Fixed Penalty Notices were issued, bringing the total since 2012 to 9,831.

The report flags the hospitality sector as an area at higher risk of non-compliance. The sector, which includes hotels, pubs and bars, has received a higher percentage of fines. This typically includes a large proportion of employees on non-standard contracts, which explains the higher proportion of non-compliance.

Small employers can become non-compliant because they are more likely to leave things to the last minute. But in most cases the nudge of a compliance notice is enough to get them back on track.

Counsell added, “Our message to small and micro employers has always been to ensure they leave enough time. But also be clear about what they will need to do to comply. We are here to help – but we will take action if an employer is wilfully non-compliant.

“There’s plenty of information on our website on how to assess and enrol people who work varying hours, so there’s no excuse not to comply.”