Employment Tax

Automatic enrolment ― overview

Produced by Tolley
  • 01 Nov 2021 12:41

The following Employment Tax guidance note Produced by Tolley provides comprehensive and up to date tax information covering:

  • Automatic enrolment ― overview
  • The automatic enrolment duty
  • Who needs to be enrolled?
  • Qualifying schemes
  • Certification requirements
  • Opting-out, re-enrolment and registration
  • Automatic enrolment and TUPE
  • Provision of information and record keeping
  • Sanctions for non-compliance

Automatic enrolment ― overview


The automatic enrolment duty

The automatic enrolment regime, established under thePensions Act 2008, Part 1, imposes a duty on employers to make arrangements for theautomatic enrolment of all of their ‘eligible jobholders’ into a ‘qualifying scheme’, which is also called the‘workplace pension’. Employers are also required to contribute to that scheme on behalf of eligible jobholders.

Under thecoronavirus job retention scheme, which is open to all UK employers for at least three months starting from 1 March 2020, employers furloughing staff during thecoronavirus outbreak can claim a grant covering 80% of thewages for a furloughed employee, subject to a cap of £2,500 a month. The government will also cover theemployer national insurance and minimum automatic enrolment pension scheme contributions employers pay on thewages they must pay their furloughed staff.

Employers can choose to provide top-up salary in addition to thegrant. Employer national insurance contributions and automatic enrolment contributions on any additional top-up salary will not be funded through this scheme. Nor will any voluntary automatic enrolment contributions above theminimum mandatory employer contribution of 3% of income above thelower limit of qualifying earnings (which was £512 per month until 5 April and is £520 per month from 6 April 2020 onwards).

For more information, see theCoronavirus job retention scheme (CJRS) guidance note.

Enrolment must be automatic and no action must be required on thepart of eligible jobholders, although they may voluntarily opt-out of theautomatic enrolment regime if they wish (see further below under Opting-out, re-enrolment and registration).

The obligation on employers to operate automatic enrolment was introduced in stages in a process that started on 1 October 2012. That process assigned to each employer a ‘staging date’ ― that original staging date is important in determining when theemployer has to consider its cyclical re-enrolment duties (see theAutomatic re-enrolment guidance note).


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