The Pensions Regulator (TPR) has disputed a report saying UK firms have paid a huge number of auto-enrolment fines unnecessarily.
According to cloud-based payroll and pensions platform, Paycircle this could amount to hundreds of thousands of pounds paid out by businesses since July 2012.
Paycircle said TPR's third quarter compliance report showed 82% of businesses seeking a review of penalty notices received had had them altered or rescinded completely.
The report was especially concerning given the huge number of small employers who are currently going through auto-enrolment.
Paycircle's co-founder Catherine Pinkney cited these figures as evidence TPR "has been too heavy handed in its auto-enrolment enforcement" and urged small employers to query if they feel the penalty they have received is unfair.
However, a TPR spokesperson disputed the findings as well as the idea that the regulator was being too heavy handed in its approach.
They said that Paycircle's figures are based on information published in TPR's latest Compliance and Enforcement Bulletin which shows just under 10% of employers who have been issued a statutory notice have asked for it to be reviewed.
The regulator said, as of the end of September 2016:
• TPR had issued a total of 34,464 statutory notices: 26,040 Compliance Notices, 904 Unpaid Contribution Notices, 6,779 Fixed penalty Notices and 741 Escalating Penalty Notices
• 3,506 employers have requested a review of a statutory notice
• The total number of statutory notices which had been either revoked, substituted or varied was 2,434.
The figures show that approximately only 7% of statutory notices issued to date have gone on to be varied, substituted or revoked following a review.
The spokesperson said: "It is not correct to suggest that a large percentage of businesses have had statutory notices from TPR altered or revoked. In fact, just fewer than 10% (3,506 employers had requested a review as of September 2016) of the employers who have been issued a statutory notice have asked for it to be reviewed. The majority of employers who receive a notice go on to comply with their duties.
"Far from being heavy handed with our enforcement, by September this year our educate and enable approach had helped more than a quarter of a million employers meet their automatic enrolment duties and put more than six million workers into a pension."
They continued: "We urge people not to ignore letters from us and to get in touch if they feel they are not subject to automatic enrolment before they receive a statutory notice or fine. "
The main reasons for which a statutory notice may go on to be varied, substituted or revoked are:
- Where an extension to a deadline has been granted
- Where TPR believed the only breach was a failure to complete the Declaration of Compliance but discovered subsequently that there were other failures to comply with the duties under the PA 2008 which also needed to be addressed
- Where a company has ceased to trade, is a director only company, is not an employer, or has become compliant before the deadline etc.
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