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Following the Finance Bill Update, Optional Remuneration Arrangements (OpRA’s) are changing the way employees are taxed on schemes that swap salary for benefits.
The new rules came into effect on 6th April this year and affect people who choose to take a company vehicle instead of a cash alternative. Essentially, this means that an individual will be taxed on the greater amount of the company car tax or the income tax payable on the cash alternative.
The graphic above highlights that in some cases an employee who chooses a low emissions vehicle will inadvertently face a higher tax bill, whilst the employer will see a rise in National Insurance Contributions (NIC). However, Ultra-Low Emission Vehicles (ULEV’s), those with emissions under 75g CO2/km, are exempt.
Ogilvie Fleet recently held our inaugural Fleet Taxation Forum, in association with Deloitte, to discuss the changes in the recent Finance Bill update and the implications on fleets and drivers.
Ogilvie Fleet’s online company car tax calculator takes the OpRA changes into account and works out whether you will be paying tax on a vehicle or the Optional Remuneration.
To find out more about the changes, you can view the presentations here.