HMRC have release changes to OpRA arrangements effective from 6 April 2019.
Who is likely to be affected:
Connected costs – employees provided with taxable cars and vans that is subject to the car or van benefit charge respectively and their employers.
Capital contributions – employees making a capital contribution towards a taxable car and their employers.
General description of the measure:
This measure addresses two anomalies in the Optional Remuneration Arrangements (OpRA) rules, by introducing legislation to:
- Ensure that when a taxable car or van is provided through OpRA, the amount foregone, which is taken into account in working out the amount reportable for tax and National Insurance contributions purposes, includes costs connected with the car or van (such as insurance) which are regarded as part of the benefit in kind under normal rules.
- Adjust the value of any capital contribution towards a taxable car when the car is made available for only part of the tax year.
The proposed legislation will ensure that the OpRA rules work as intended. It ensures that the value of the amount foregone includes any amounts given up in respect of connected costs. Under the provisions of the current OpRA legislation, the value of any connected costs is not included when calculating the value of the amount foregone for a taxable car or van. It also aligns the approach with the car benefit charge which makes provision to adjust the level of a capital contribution if the car is made available for only part of the tax year.
Further details are available on the HMRC website by clicking here