PSI4.4.2 - Free Standing AVC Schemes (FSAVCSs): General

(This archived guidance relates to HMRC discretionary practice before the 6th April 2006. For current guidance on Registered Pension Schemes see the Registered Pension Schemes Manual)

Section 591(2)(h) ICTA 88 enables the approval of a scheme "to which the employer is not a contributor and which provides benefits additional to those provided by a scheme to which the employer is a contributor". An employee may not join, or remain in membership of, a FSAVCS unless he or she is simultaneously accruing benefits under an approved or relevant statutory scheme to which the employer contributes. This condition has to remain satisfied if the employee's membership of the FSAVCS continues or recommences alongside a subsequent employer's scheme. An employee may contribute at the same time to both his or her employer's scheme and a FSAVCS but cannot contribute to more than one FSAVCS in respect of the same employment in any single tax year.

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