Professional December 2017/January 2018


On your behalf

Policy team update

Diana Bruce MCIPPdip, CIPP senior policy liaison officer, provides an update on a recent CIPP quick poll, voluntary payrolling, gender pay gap reporting and scam calls

BiKs and cash options Are you aware that if you offer employees a benefit in kind and they have a choice of a cash option, the tax and National Insurance contributions (NICs) rules have changed? This is the question we asked during October through our website quick poll. Anyone can respond to these polls, not just members of the CIPP. We received 579 responses in total and 55% said they were aware of the changes but the remainder – a staggering 261 people (45%) – said that they were unaware of the changes. Our polls are just a snapshot in time so not an accurate reflection, but these results indicate that there is further work to do around raising awareness to ensure employers are being compliant with the change in legislation. If you’re wondering what are the changes I am talking about then please read on and share with others. Optional remuneration arrangements (OpRA) which came into effect from 6 April 2017 are essentially the government’s way of trying to remove some of the previous tax and NICs breaks which came about if salary sacrifice was used to pay for benefits

in kind (BiK). Although salary sacrifice is very much still with us, there are two types of ‘arrangement’ that come under OpRA. Type A arrangements is the first and are what employers have regarded as typical salary sacrifices, where an employee gives up cash earnings in exchange for a BiK. Type B arrangements are where an employee chooses a benefit rather than a cash allowance, such as a car or living accommodation. So, for the purposes of the ‘benefits code’, a benefit is provided under OpRA if it is provided under an arrangement of either type A or type B – so it isn’t just salary sacrifice that is captured. The benefits code has been revalued and the employee is taxed on whichever value is the higher – the cash or the benefit. However, where an employee receives, say, a car allowance, but there was no option to receive a company car, the employee is taxed on the car allowance – cash is cash, you process as you would have pre-April 2017. There are four specific exemptions where the rules haven’t changed: pensions, childcare, cycle to work and ultra-low

emission vehicles; these are the politically astute exceptions, so employees get to keep the tax and NICs breaks on those. Transitional provisions (also known as ‘grandfathering’) were brought in for arrangements in place before 6 April 2017; so, the new rules for these arrangements will take effect from 6 April 2018 for all benefits except cars with CO2 emissions of 76 grams per kilometre and above, employer-provided living accommodation, and school fees. The old rules will continue to apply for these three types of benefit until 6 April 2021. For further information on OpRA visit MY CIPP on our website – – where you will find a webcast ( ptj2V58vjcw) on this subject and also other topical webcasts – an easy way to update your team on aspects of payroll legislation. All published information on our polls and surveys can be found in the CIPP’s Policy News Journal (, a benefit reserved exclusively for CIPP members. Voluntarily payrolling The CIPP’s Advisory service has been receiving calls about the change from voluntary to mandatory payrolling of company car data from April 2018. To clarify: for those of you who voluntarily payroll company cars as a benefit in kind,

...mandatory from this time to submit your car data information in the full payment submission

| Professional in Payroll, Pensions and Reward | December 2017/January 2018 | Issue 36 4

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