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BCC wants small business auto-enrolment exemption

The British Chamber of Commerce is calling for new businesses to be exempt from having to automatically enrol staff into pension schemes for the first three years of trading or until they have more than ten employees.

In a survey of 1,000 sole traders by the BCC, released today, 32 per cent said that the forthcoming requirement to auto-enrol staff in a pension was one of the biggest barriers to taking on staff.

BCC director of policy Dr Adam Marshall (pictured) says: “Exempting new businesses from upcoming pension reforms, either for the first three years in business or until they have more than ten employees, would remove one of the biggest barriers to job creation.”

National Association of Pension Funds chief executive Joanne Segars says: “The pensions auto-enrolment reforms are a major step forward that will help tackle a massive pensions saving crisis. They need to be applied to all employers of all sizes without exception.”

In March’s Budget, Chancellor George Osborne announced a three year moratorium on new regulation for start-up businesses and those with fewer than 10 employees.

Marshall says: “The Government’s move to exempt micro businesses from new regulation fails to take into account the vast amount of existing legislation, which is seen by sole traders as a major deterrent.”

From 2012, people will start to be auto-enrolled into pensions, though they will be able to opt out. Firms will have to pay a minimum contribution of 3 per cent either into the National Employment Savings Trust or their own pension schemes.

In June, a survey of 1,200 businesses by the Institute of Directors found that 42 per cent of companies expect a fifth of their employees to opt out of auto-enrolment.

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