New pension rules will affect majority of farms

Farm and estate businesses are being warned to get up to speed with new pension arrangements as new regulations come into force from this week that affect businesses employing between 1 and 30 people.

"The majority of farm and estate businesses will be contained in this bracket of between 1 and 30 employees, as will small family businesses," said Susie Swift of Saffery Champness

"Family employees such as nannys and carers have already been flagged up as examples. The auto-enrolment process for pensions has been ongoing for some two years, concentrating predominantly to now on larger employers, but we have reached the stage where it is the turn of smaller employers to be enrolled.

The new rules apply to employees aged between 22 and retirement who earn £10,000 per annum or more. The current auto-enrolment payment is 2 per cent of salary, although this is set to rise in stages to 8 per cent in 2018.

Once enrolled, a percentage of the employee’s pay will be automatically deducted, with the employer also contributing, and the Government contribution coming through tax relief.

Any employee has the right to opt out of a scheme, but must be enrolled in it first to enable them to do so.

For those employers that ignore the new rules and registration, fines of up to £400 can be applied, evolving into more severe daily penalties for persistent inaction.

Swift said: "We would urge rural employers to move quickly now to enrol and, where they have any doubts about doing this, to talk to their professional adviser."