ADVERTORIAL


Is your franchise ready for auto enrolment?


bring an increased burden in administration and introduce a level of fi nancial penalties that could send a company out of business – welcome to pension auto enrolment! There have been various campaigns explaining what auto enrolment is, but these can’t really do justice to the impact this new legislation will have on your organisation. The government will be phasing in auto


I


enrolment until 2018, with the largest employers coming under the regulations fi rst. The Pensions Regulator (TPR) will write to each employer to notify them of their staging date approximately 12 months beforehand, with a reminder being sent three months before. TPR are recommending that individual businesses start making their plans 12-18 months prior to their staging date, but franchisors really should start planning two years prior to the fi rst franchisee staging date within their network. Franchisees, like most businesses, require support when it comes to their accounts, payroll and new pieces of onerous legislation like auto enrolment.


Figure 1


Employees in PAYE scheme


1-4 5-49


50-249 250-499 500+


Daily Penalty


£50 £500 £2,500 £5,000 £10,000


Confi rm the staging date of each franchisee You can fi nd out the staging dates of each of your franchisees relatively easily; you will need to have their Pay As You Earn (PAYE) reference number to hand and either look on TPR website or contact EKW Group (a bfa-


24 | www.franchisornews.co.uk


n October 2012, new legislation was brought in that will affect almost every employer (including both franchisors and franchisees) in the country. It will increase employers’ payroll costs, reduce employees’ income in the short term,


affi liated accountant) who can look after this process for you.


Confi rm with payroll provider what their plans are If you have a sole payroll provider for your franchisees, the whole process should be simplifi ed. Payroll companies are best placed to offer an auto enrolment service as the information required to deliver the service sits with them. Most accountants will have an internal payroll provider that will offer this service. Within the EKW Group resides a specialist payroll bureau called PAYEpeople who already deliver auto enrolment solutions to UK-wide networks. Without a sole payroll provider it may be


diffi cult to ensure that each provider offers the right solution to your network. Now may be the time to look at having a sole provider who you can negotiate preferential rates with.


Select and speak with chosen pension provider With auto enrolment, a lot of the focus has been on ensuring businesses remain compliant, however, we need to remember that the whole point of this legislation is to ensure that employees are saving for their future and we must ensure, therefore, that the money is invested in the best scheme for employees.


Negotiate rate for network receiving auto enrolment service As a franchisor, you can use economies of scale to negotiate better rates and, often, you will fi nd suppliers have specifi c franchise network rates to offer. With auto enrolment being a new service, we have seen that the rates being charged can vary from a few hundred pounds per year to ridiculous charges amounting to many thousands of pounds per year.


Ensure that each franchisee has an auto enrolment solution in place Every employer needs to prepare for auto enrolment by planning for the additional costs to their payroll and communicating to their staff how it is likely to affect them.


Receive key business intelligence to show network remains compliant Auto enrolment isn’t just a one-time process. Each employer needs to continue to assess their workforce, auto enrol their employees, register and re-register with TPR and maintain a signifi cant amount of staff communication. If employers don’t get this right there is the potential for a highly punitive daily penalty, as shown in Figure 1. It is imperative, therefore, that franchisors receive key business intelligence from their network showing they are compliant, as non-compliance simply isn’t an option. n


For more information on pension auto enrolment or if you would like to speak to someone regarding outsourcing your payroll and auto enrolment please contact EKW Group on 01942 816 512


Confirm the staging date of each franchisee


Confirm with payroll provider what their plans are


Select and speak with chosen pension provider


Negotiate rate for network receiving auto enrolment service


Ensure that each franchisee has an auto enrolment solution in place


Receive key business intellgience to show network remains compliant


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