The Pensions Regulator (TPR) will be responsible for ensuring that you comply with your Employer Duties. Although they will focus on education rather than imposing penalties, they do have the powers to take action against Employers who fail to carry out their duties.
There is a three stage process that TPR will follow:
Stage 1: Compliance / unpaid contribution notice
This will detail the breach and instruct you to put things right within a specific timescale. It may include a requirement to pay the backdated contributions plus interest.
Stage 2: Fixed Penalty Notice – £400
If you have not followed the Compliance Notice (Stage 1) you will be issued a Fixed Penalty Notice giving four weeks (typically) from the date of the Fixed Penalty Notice to put things right. Failure to comply by that date will result in the Fixed Penalty being applied.
Stage 3: Escalating Penalty Notice
If you still do not comply, daily escalating penalties will apply:
No. of Employees 1-4 Daily Rate £50
No. of Employees 5-49 Daily Rate £500
No. of Employees 50-249 Daily Rate £2,500
No. of Employees 250-499 Daily Rate £5,000
No. of Employees 500 or more Daily Rate £10,000