There have plenty of warnings and notice about this, but it seems that some employers just weren't getting the message. Now the Pensions Regulator's gloves are off, and the first fines are being handed out.

They're not playing around, either. Make no mistake, this is a full-on criminal prosecution we're talking about. Oldham bus company Stotts Tours was charged with deliberately failing to set 36 of its employees up with a Workplace Pension. In technical terms, that amounted to 8 counts of wilful failure to comply with section 3(2) of the Pensions Act 2008. Both the company and Managing Director Alan Stott pleaded guilty to the charges late last year, and now the sentences have been announced. Here's what the total damage comes to:

Penalties for the company

  • £27,000 fine.
  • £7,400 costs.
  • £120 victim surcharge.
  • Approximately £10,000 in pension contributions, backdated.
  • £14,400 civil fines for failure to comply with automatic enrolment rules.

Penalties for the Managing Director

  • £4,455 fine.
  • £120 victim surcharge.

Pensions, and the looming crisis about them, are starting to be taken extremely seriously. Millions of the UK's self-employed workers, for instance, have no pension savings at all. In industries like the building trade with a largely self-employed workforce, this is a major issue. For fully-employed people, automatic enrolment is supposed to offer a measure of security for the future. This judgement and sentence are sending a message loud and clear to employers. Get yourself straight with the law or face the consequences.

Even so, this probably won't be the last time the Pensions Regulator flexes its muscles, whether due to deliberate non-compliance or simple ignorance of the rules. With HMRC intensifying its crackdown on false self-employment, it's looking grim for employers trying to dodge the laws.

We're talking about hefty fines, a criminal conviction on the books and massive damage to their reputations. All this comes at a time when many in the UK are starting to realise that their employment status isn't what they thought it was. The gig economy, zero-hours contracts and other flexible working arrangements are muddying the waters in several industries. Meanwhile, employers have been, intentionally or otherwise, misclassifying employees as self-employed contractors. HMRC's had enough, and they're taking names.

In practical terms, if you're employed and don't know whether you're enrolled in a Workplace Pension scheme, you should get in touch with your employer. If you employ people yourself, you need to make sure you're following the pension rules. 

If you need help with your tax return let us know. While we're doing that we can also check if you're due a tax rebate. Get in touch with RIFT.