HomeFWJ TakeawayResourcesEmployer financed unapproved retirement benefit scheme

An Employer Financed Retirement Benefit Scheme (or “EFRB”) is an unregistered pension scheme set-up by an employer to provide retirement benefits to directors and other senior members of staff.

  • Members of an EFRB will not receive the statutory protection afforded to beneficiaries of a registered pension but also are not limited by the annual or lifetime allowances which limit contributions to registered pension schemes.
  • an EFRB can be run alongside an approved pension scheme, with the conventional protection that exists for such schemes;
  • however, the advantage of an EFRB is that it can provide an employer with various reliefs on asset holdings and may prove attractive where an employee/beneficiary who are domiciled overseas or who expect to be tax resident outside of the UK when benefits are drawn.

EFRBs are expensive to set-up and therefore advice from a tax accountant is recommended as part of considering such schemes.

In recent years, HMRC have sought to treat EFRBs which seek to avoid or defer taxes payable as a tax avoidance scheme. An EFRB, where not appropriately used, is a prohibited tax avoidance scheme and since April 2019 may fall foul of any demand for accelerated payment with the implementation of loan charges.


At Francis Wilks & Jones we have considerable experience of negotiations with HMRC, including accelerated payment notices, personal liability notices and much more. Please call any member of our tax disputes team for help today

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