Employers need to report all BiKs including those under optional remuneration arrangements (OpRAs), to HMRC on form P11D from 6 April 2018, unless they are registered to voluntarily payroll benefits.
OpRAs are where an employee gives up the right to an amount of earnings in return for a BiK and includes flexible benefit packages with a cash option, cash allowances and salary sacrifice.
From the 2018/19 tax year, the rules will cover all OpRAs, apart from those for cars with emissions above 75g CO2/km, school fees and accommodation, which will be included from 6 April 2021.
If a BiK is provided under OpRA rules, the taxable value is 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.
Employers need to ensure that they complete their P11Ds accurately, including all the details of cars and loans provided.
If you require any further help or support regarding these changes please get in touch with Sue Stephens.