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Employers reminded about reporting responsibilities following tax changes to BiKs

Employers have been reminded that they must report all Benefits in Kind (BiKs), including those under the Optional Remuneration Arrangements (OpRAs) or “salary sacrifice” to HMRC on form P11D, unless they are registered to voluntary payroll benefits.

Chris Hutton, partner with Mountsorrel-based Charnwood Accountants said it was important that employers abide by the new reporting rule, which came into force on April 6 this year.

OpRAs are where an employee gives up the right to an amount of earnings in return for a Benefit in Kind (BiK). They include flexible benefit packages with a cash option, cash allowances and salary sacrifice. All BiKs are now valued at the higher of the cash given up or the value of the BiK. Many previously non-taxable BiKs are now taxable, valued on the cash given up.

Cars with emissions of 75g CO2 / km or less, pensions, pension advice, childcare and Cycle to Work benefits are unaffected by the changes.

Chris added that subject to a few specific exceptions, arrangements entered into on or before 5 April 2017 kept their previous tax treatment until the earlier of a renewal or variation of the arrangement. Such arrangements moved into the new rules on April 6 2018.

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