EIM15028 - Non-approved and employer-financed retirement benefits schemes: meaning of “scheme”

Section 611(2) ICTA 1988 and Section 393A(4) ITEPA 2003 and Statement of Practice 13/1991

There must be a “scheme” for a charge to arise under the non-approved or employer-financed retirement benefits scheme legislation.

The definition for both is essentially the same and states that it “includes a deed, agreement, series of agreements or other arrangements” providing for relevant benefits (see EIM15020 for the definition of relevant benefits). The definition therefore has a wide scope.

In HMRC’s view, the term “arrangement” in this context goes wider than any prior formal or informal understanding between the employee and the employer. It also includes any system, plan, pattern or policy connected with the payment of a “relevant benefit” (see EIM15021). A scheme may be quite informal. It includes, for example:

• a decision at an employer's meeting
• a decision by an employee with delegated authority or in accordance with a policy
• a situation where it is common practice for an employer to make a payment to a particular class of employees 

There may be exceptional circumstances where a payment is not made under an “arrangement”. The position in individual cases can be determined only on their facts. In cases where it is claimed that the facts of the case do not constitute a scheme or an employer is unsure whether the payment is made under a scheme please refer the case to Pension Scheme Services (Technical), Yorke House, Castle Meadow Road, Nottingham NG2 1BG.