OpRAs are where an employee gives up the right to an
amount of earnings in return for a Benefit in Kind
(BiK) and includes flexible benefit packages with a
cash option, cash allowances and salary sacrifice.
The Income Tax and employer National Insurance
contributions (NICs) advantages of BiKs - and employee
NICs advantages where a charge exists - have mainly
been withdrawn due to new rules that took effect in
April 2017.
From today, the rules will cover all OpRAs, apart from
those for cars with emissions above 75g CO2/km, school
fees and accommodation – these will be included from 6
April 2021.
If a BiK is provided under OpRA rules, the taxable
value is now the higher of the cash foregone or the
taxable value under the normal BiK rules. This applies
to all BiKs, including those that were previously
exempt, such as workplace parking.
However, pensions, pension advice, childcare,
cycle-to-work schemes and cars with emissions of 75g
CO2/km or less are not affected by the rules.
P11Ds need to be accurate
Employers need to ensure that they complete their P11D
accurately, including all the details of cars and loans
provided.
Common errors in P11Ds received by HMRC include
inaccurate recording of car emissions, time
apportionment and free use of fuel, and the incorrect
classification of ‘making good’.
The closing date for employers to send P11Ds to HMRC is
6 July 2018.
You can read general guidance
on salary sacrifice as well as technical
advice.
