Optional Remuneration and Salary Sacrifice
The optional remuneration arrangement (OpRA) was introduced this year and is the new name for Salary Sacrifice.
Changes have been made to the new legislation which excludes some benefits which may have qualified for tax exemption if they were offered through salary sacrifice. The rules are not straight forward.
Salary sacrifice has been growing in popularity and this change made by HMRC is to challenge the impact to the Treasury’s Revenues.
The benefits to offer such schemes for an employer are it helps with offering a complete rewards package. However an employer must consider how it will affect current terms and conditions for their staff. Employers will also need to consider how it will work with legislation and tax.
If it is not thought out well it could have serious implications. HMRC have introduced some transitional rules for all salary sacrifice schemes.