What are Optional Remuneration Arrangements (OpRA)?
If you offer your employees cash allowances, flexible benefit packages with a cash option, or salary sacrifice in return for a Benefit in Kind (BiK), here’s what you need to know:
- All BiKs are now valued at the higher of the cash given up or the value under the traditional rules.
- All previously non-taxable BiKs are now taxable, valued on the cash given up.
- Cars with emissions of 75g CO2 /km or less, pensions, pension advice, childcare and Cycle to Work are unaffected.
Arrangements entered on or before 5 April 2017 kept their previous tax treatment until the earlier of a renewal or variation of the arrangement. Most pre-6 April 2017 BiKs moved into the new rules on 6 April 2018.
Benefits now subject to OpRA rules
- Car parking
- Private medical / dental insurance
- Technology / mobile phones
- Cars (over 75g / km) / vans
- Car fuel
- Use of assets – assets made available by employers for use by employees – e.g. computers, televisions, bicycles
- Transfer of assets – assets bought, sold or given by employers to employees – e.g. computers, televisions, cars, bicycles
- Authorised mileage allowance payments
- Own goods / products
- Health assessments
- Pension loan
More detailed guidance has also been issued which forms part of the Employer Income Manual (EIM) part for OpRA guidance: