Do Auto Enrolment duties apply to me – I’m a director of a Limited Company

What should you do if you are a sole director? Do Auto Enrolment duties apply to me??

If you are a Director of a limited company then for Auto Enrolment purposes you are classed as a “Office holder” and not an employee.  If a limted company has a sole director or a number of directors without contracts of employment then it is unlikely Automatic enrolment applies to your limited Company.

If a director and any other person employed in the company has a contract of employment with that company then the director is classed as a worker for auto enrolment purposes and will need to be assessed and may need to be required to automatically enrol.

If two or more directors have a contract of employment then they do need to be assessed for Automatic enrolment.

Let’s illustrate with an example of a small family business.

Paul and Mary run a small graphic design business from their home, they are both directors and neither of them has a contract of employment.  This means that automatic enrolment won’t apply to them.  Then later their son Sam joins the company as a director and is given a contract of employment.  The fact that he has a contract and is a director and the only one to have a contract means that the company will still be exempt from Automatic enrolment, but, then their daughter Sophie joins as another Director.  She is given a contract of employment as well which means the company now has duties both for her and for Sam.  Even though Sam and Sophie are directors they both have contracts of employment.  If mum and dad decide they need some extra help and employ a new employee, then they will need to assess that person also to determine whether they need to be automatically enrolled.

If your circumstances change and you do need to assess workers for automatic enrolment then you must let the pension regulator know at that point.

What do you need to do

If you are a sole director company, with no other staff or your company has a number of directors , none of whom has an employment contract or your company has a number of directors, only one  of whom has an employment contract and you have received a letter from the pension regulator.  Then in line with your Staging date you will need to let the Pension Regulator know that you do not need to operate an Auto Enrolment pension scheme as you are not an employer.

How do you do this

You need to have your letter code to hand and complete the online form on the pension regulator website to tell them you are not an employer.

Don’t want the hassle

If you don’t want the hassle and you haven’t got the time to trawl through the pension regulator’s website trying to find the correct forms and worrying that you haven’t completed it correctly.  Contact us and we can give you the details of the service we are offering where we will complete this for you and take away this headache so you don’t risk a fine for Non Compliance. 

This article is for general information only and no action should be taken, or refrained from, as a result of this information. Professional advice should be taken based on specific circumstances in each individual case. Whilst we endeavour to ensure that the information contained in this article is correct, no liability will be accepted by KMA Accountancy for damages of any kind arising from the contents of this communication, or for any action or decision taken as a result of using any such information.


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