Written by Director, Huw Moseley:
When the new tax year came in at the beginning of the month on 6thApril, there was a flood of information that has left some small businesses reeling, and some of them confused about pension contributions and auto-enrolment.
Let’s break it down.
For the tax year 2018/2019 there are changes in legislation, which means if you employ people you’ll need to take action to:
- Increase your pension contributions to 2% of salary (that’s £200 a year per £10,000 salary)
- Increase the minimum total auto-enrolment contribution to 5% (so that’s a minimum total of 5% contribution that you and your employees put in together).
It’s worth noting that this means if you’re only increasing salary contributions to 2%, your employees will have their contributions automatically increased to 3% in order to meet the minimum auto-enrolment total of 5%. It’s worth mentioning to them that their contribution comes from their pre-tax salary, so its actually costing them less than they may think – and you can point them in the direction of Martin Lewis’ article that explains in more detail why they should remain ‘opted in’.
Here at Link Accounting, we’re encouraging all our clients to look ahead and consider the impact of these changes, not just this year, but next year too as from 6thApril 2019, the employer’s minimum pension contribution is set to rise to 3% (8% total minimum contribution).
Complying with legislation and having good management information is key to the success of your company in the current economic climate.
If you’re a growing business, your year-end accounts simply aren’t regular enough. Many of the new and developing companies we’re working with in Banbury need information on a monthly or quarterly basis in order to make management decisions and proactively monitor their profitability. We can help you develop your systems in order to ensure this information is at your fingertips to help you with your day-to-day decision-making.
Take a look at this page on our website for more information.