Employers must contribute to the pensions of their domestic help or face a tax evader’s fine under the government’s automatic enrollment scheme say SA Law Partner & head of Employment Law, Chris Cook
Families employing domestic help have been caught by surprise. Under the government’s automatic enrollment scheme, they will have to fund pension contributions for nannies, cleaners and gardeners whose pay exceeds £10,000 a year, or face a £400 fine.
In 2012 the government introduced its automatic enrollment scheme which requires every employer in the UK to enroll their eligible workers in a pension scheme and to start contributing. The new employer duties are being implemented month by month over a five-and-a-half-year staging period that started on 1 October 2012.
The automatic enrollment scheme doesn’t just apply to businesses: people employing at least one person will be required by law to ensure that they are enrolled into a workplace pension. This news is likely to come as a shock to many who might not consider themselves employers, but take on domestic help such as a nanny or carer.
While larger employers were first introduced into the scheme by the government, smaller employers (including those who only employ one or two people) over the next two years will gradually be obliged to offer their staff pensions under the auto enrollment programme. Employers will initially be making contributions of 1%, increasing to 2% in October 2017 and 3% from October 2018.
If your worker is over the age of 22…
To read the full article, please click here.