Small and micro businesses in the UK could face fines totalling £25m if they fail to meet their auto-enrolment (AE) deadlines.
According to figures from research payroll platform Paycircle, as many as 1.8 million small employers will begin to ‘stage' by 2018.
Figures from The Pensions Regulator (TPR) show around 5% of companies that have staged so far failed to comply with the law and were handed fines since July 2012.
The latest TPR data shows around 7,800 compliance notices have been issued since 2012, with 806 penalty notices issued in the first three months of 2016 alone.
If the current rate of fines being handed out continues, then between now and 2018, an estimated 63,000 small and micro UK employers - roughly 3.5% of those due to auto-enrol - will receive fixed non-compliance fines totalling over £25m.
Paycircle co-founder Catherine Pinkney said: "Not only will many of the UK's smallest businesses face significant set-up costs for their workplace pensions, but a large number will also receive a fixed penalty fine."
Recent findings from TPR show that 40% of micro employers are expected to spend millions on external advisers for pensions advice.
The cost of this advice, coupled with potential fines, could leave AE costing small businesses as much as £350m by 2018.
"Now is the time for small firms to be proactive about auto-enrolment or face fines that can rapidly escalate," said Pinkney.
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