The Pensions Regulator issued 15,073 compliance notices between July and September 2016 as a result of smaller firms failing to declare their compliance.

In its Quarterly Compliance and Enforcement Bulletin, TPR reported that it issued 111 information notices in the period and 196 in the year to September 2016.

The number of compliance notices issued rose to more than 26,000, however, less than 5 per cent of these progressed to an escalating penalty.

Five hundred and seventy six escalating penalty notices, in which firms are charged between £50 and £10,000 per day for failure to comply, were assigned in the period and 741 to September 2016.

The regulator issued a further 3,728 fixed penalty notices to employers in the quarter.
TPR outlined that unacceptable excuses for the failure to complete the declaration of compliance include: relying on someone else and being let down, having difficulty with the online system, not getting a reminder, making a mistake or illness of the employer or a member of staff.

The increased notices follow a 50 per cent increase in employers reaching their deadline to comply with auto-enrolment.

Charles Counsell, executive director of automatic enrolment at TPR said: "We recognise that employers have unique circumstances and challenges, but the law is still the law. Employers who are struggling should contact us, we are here to help - do not wait for a fine.

"The vast majority of employers are successfully meeting their automatic enrolment duties and are doing the right thing for their staff. A small minority do leave plans too late but in most cases the nudge of a compliance notice is enough to get them back on track and avoid a fine."

The data ultimately suggests that many small businesses are still unclear about their workplace pension duties and more needs to be done to rectify this.

Paycircle co-founder Catherine Pinkney said: “The rise in the number of fixed and escalating penalty notices handed out during the latest quarter is frankly staggering. An increase in the number of fines was always on the cards as the smallest businesses started to stage but these numbers are a real cause for concern.

“Between now and 2018 over a million small businesses are set to stage and, judging by this data, the number of fines is set to skyrocket.

“For a multitude of reasons, not least considerable confusion around whose responsibility the workplace pension is — payroll provider, accountant, bookkeeper, adviser or employers themselves — many firms are burying their heads in the sand.

“The message is still not getting out to smaller business owners that they can set up a fully compliant workplace pension scheme themselves at no cost, and in some cases in as little as an hour."

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