Graham Wrightson, a partner at Stephenson Harwood, takes a look at the Pensions Regulator’s new software tool
For those of you who are looking for tips on small pest control in this blog, you will be sorely disappointed. (I would refer you to Pest Magazine - www.pestmagazine.co.uk - who I notice do a particularly good line in cockroach traps).
My focus is, instead, on the Regulator’s (TPR) consultation and subsequent proposals to develop a basic software tool to support users of HMRC’s Basic PAYE Tools (BPT). TPR has done this in the knowledge that, over the next couple of years, some 200,000 small and micro employers will come crawling out of the woodwork to stage for auto-enrolment.
While commercial payroll or pension administration software mite be available to this swarm of employers, TPR is not convinced that they would take up that support (and it is that software into which auto-enrolment calculations would ordinarily bee integrated).
The Regulator therefore believes there is a real risk that employers will attempt to assess their workforce and calculate contributions manually. That is not going to fly from TPR’s perspective – it increases the risk of errors and, ultimately, non-compliance.
TPR therefore consulted on whether there was a need to beetle to develop the tool and, if it did so, that it would be a proportionate response to the risk identified. It seems that the majority of respondents were beehind that proposal.
TPR wasp also keen to ensure that, in supporting BPT users, it did not adversely affect the market and remove any incentive for employers to seek better solutions elsewhere. As there was no clear consensus on this (and to avoid a disproportionate use of regulatory resource), TPR has chosen to limit the functionality of its offering. It might not, therefore, be the bees knees but it should provide a good starting point.
Also, employers who download the tool will be given a range of options - use commercial payroll software/services, use a third party provider or use TPR’s tool - and will be able to link to HMRC’s payroll software list, most of which includes auto-enrolment functionality.
The new auto-enrolment tool is intended as a simple aid for employers, allowing those who might otherwise struggle to undertake auto-enrolment calculations to tick this off their list. It is being launched around November 2015.
Let’s just hope that employers who opt for its use over commercial offerings do find that it really is the lesser of two weevils!
Graham Wrightson is a partner at Stephenson Harwood