Auto enrolment is a government initiative to help people save through a pension scheme, making it compulsory for employers to automatically enrol their eligible employees into a pension scheme.
There are 5 elements:-
1. Staging Date
2. Eligible employees
3. Calculating Employer contribution
4. Concept of a “waiting period”/deferment
5. Employer duties
Provide Retirement benefits to all the employees i.e., eligible, non-eligible and entitled.
Applies to company with at least 1 employee.
Contribution is made by both employer and employee in specified fixed ratio.
Employer gets the benefit of tax rebate on the pension amount.
Pension amount cannot be used in any way by the directors/employers or the employees.
No such loan or benefits exist.
SSAS
The SSAS (Small Self-Administered Pension Scheme) is one of the pension schemes with exclusive qualities that make it an affective financial planning tool.
A great scheme for family business and small partnership companies. Main elements:-
1. A Trust with all members as trustees.
2. Sponsoring Employer.
3. One independent trustee.
This scheme applies only to directors/ key staff and can be extend to their relatives irrespective of their employer.
Number of members is limited to 12.
Contribution is made by the member or the employer.
There is whole set of tax benefits attached to this scheme. For example – no income tax, no capital gain tax, no corporation tax. All subject to conditions.
The pension scheme allows you to borrow the 50% of SSAP fund.
Enables director to buy their own business assets, lend money to their own business as well as others.
Sumit Agarwal (ACMA ACA India), the Managing Partner of DNS Accountants is a highly respected accountant in Harrow with expertise in helping owner- managed businesses.