OpRA’s defined

The Optional Remuneration Arrangements (OpRA) legislation was introduced with effect from 6 April 2017. The legislation counters the tax and NIC advantages of benefits where an employee gives up the right to an amount of earnings in return for a benefit. This includes flexible benefit packages with a cash option, cash allowances and salary sacrifice.

The taxable value is now the higher of the cash foregone or the taxable value under the normal BiK rules. A benefit is deemed to be provided under an OpRA if it is provided under an arrangement of either type A or type B.

Type A arrangement

Type A arrangements are arrangements under which the employee gives up the right, or the future right, to receive an amount of earnings which would be chargeable to tax in return for the benefit.

Type B arrangement

Type B arrangements can be defined as – other than type A arrangements – under which the employee agrees to be provided with a benefit rather than an amount of earnings.

A benefit does not include arrangements under which the employee reduces their working hours or becomes entitled to additional unpaid leave.

Posted in Payroll

Exeter Accountant MJ Smith & Co

Celebrating 25 years of excellence.

Free 1st Meeting
Fixed Fees
Free Support!

Find out more

Client Portal Login

Forgot Password?

Latest News

Changes to the Employment Allowance

It was announced as part of the Autumn Budget 2018 measures that access to the Employment Allowance was to be …
Read More

Loss buying restrictions

Under qualifying circumstances, Corporation Tax (CT) relief is available where your company makes a trading loss. The trading loss can …
Read More

OpRA’s defined

The Optional Remuneration Arrangements (OpRA) legislation was introduced with effect from 6 April 2017. The legislation counters the tax and …
Read More

Twitter Feed