Businesses that flout their workplace pension duties face being subjected to random spot-checks by the Pensions Regulator.

Employers that provide details to HMRC are having that data cross-referenced by the watchdog in an attempt to identify non-compliance with auto-enrolment.

The checks are designed to identify businesses that are failing to enrol eligible staff into a workplace pension scheme or that make incorrect, or no, contributions.

All businesses with staff aged between 22 and state pension age, and earning more than £10,000 year, have to be auto-enrolled into a workplace pension.

Those who fail to comply may be the subject of short-notice inspections, which began in May and will continue throughout the summer.

Darren Ryder, director of auto-enrolment at the Pensions Regulator, said:

“Our data and intelligence streams enable us to detect potential non-compliance and take swift action against employers.

“This allows us to target our resources in a very focused way as part of our role to protect pension savers.

“A minority of employers who ignore their responsibilities can expect a knock at the door from us, and enforcement action.”

By law, employers have to take part in the spot-checks if the Pensions Regulator comes knocking.

Witholding information when asked, or obstructing an inspector, are criminal offences and may result in legal action or fines.

According to the Regulator in May 2019, more than 1.5 million businesses are complying with workplace pensions legislation.

While the figure represents the majority of UK employers, the number of fines being issued for non-compliance is rising.

The Regulator issued fines worth a total of £68,626,923 to employers that failed to meet their pension obligations in 2018/19 – up from £192,900 in 2014/15.

Employers that fail to comply with statutory notices for auto-enrolment initially receive a £400 fixed penalty notice.

Should they ignore that warning, an escalating penalty notice can fine employers between £50 and £10,000 a day.

Speak to us about your auto-enrolment duties.