Have You Planned For The Pay And Pension Changes?

Care homes should have already considered the new National Living Wage (which came into effect on 1st April) and Auto Enrolment.
A recent care homes survey undertaken by Bishop Fleming’s specialist care homes team underlined the concerns of providers over the ever increasing costs of employment and red tape.

The biggest majority (82%) of respondents agreed that the imposition of “the living wage” will increase their payroll costs, with no sign of local authorities being able to match that increased cost with increased fees.

From 1st April 2016 anyone aged 25 or over (and not in the first year of an apprenticeship), was legally entitled to at least £7.20 per hour pushing up the cost of caring for the elderly or disabled. With enforcement likely to be as vehemently applied as that for the National Minimum Wage it is important that employers take steps now to protect themselves from significant potential fines.

Almost as many (80%) also reported that the new rules on auto-enrolment pensions will be complex for care homes, which have a high level of part-time and short-term employees.

Tim Godfrey, Head of Care Homes at Bishop Fleming Chartered Accountants comments, “care homes need to take action now as the Pensions Regulator turns its attention on up to half a million small businesses. Failure to comply means employers will face a minimum penalty of £400 with escalating penalties of up to £10,000 a day (depending on staff numbers).

“Leaving it too late means there will not be enough time for employers to meet the staging date, as pension scheme providers face ‘capacity crunch’ in coping with the demand. Businesses that have received a letter from the Pensions Regulator and have not yet acted should do so now.
“The new rules on auto-enrolment pensions will be complex for care homes which have a high level of part-time and short-term employees and Government plans to increase wages and impose pensions are eminently worthy, but there is no matched funding for local councils to increase the fees they pay to absorb those extra costs”.

Bishop Fleming specialise in providing accountancy and payroll services to care homes and have developed a straightforward solution for businesses looking to meet their auto enrolment and pension responsibilities. For further information, contact Tim Godfrey, head of care homes at Bishop Fleming Chartered Accountants on 03333 219 000, email tgodfrey@bishopfleming.co.uk or visit www.bishopfleming.co.uk.