Small business owners are getting ready to take another hit from the government, it has been reported. The new government pension rules will affect many small business operations to the tune of about £2,550 annually.
A typical small business employing four workers with average earnings of at least £25,000 will have to find the extra money because of workers automatic enrolment in pension.
The new rules, set to go into effect by 2012, force enrolment of anyone earning £7,475 who is employed by the same company for 90 days running into the company’s pension scheme. The worker will contribute 4 per cent of his or her earnings, while the company must contribute 3 per cent.
Small business spokespeople say that while small businesses recognize the need to save for everyone’s future, the automatic pension enrolment rules will force many businesses out at present.
This is just another difficulty being brought upon small business, which already carries a disproportionate share of the national economy on its back. By 2017 all businesses must be invested in the pension scheme.