Under the new rules, tax and insurance savings, when a benefit is granted under an optional compensation agreement, is now limited even if the salary is replaced by a tax-exempt benefit (if it would have been granted outside an OpRA). For example, a worker who sacrifices part of his salary for the provision of a parking lot no longer attracts relief, except for the employee`s NICs. As a general rule, payments made by an employer for the granting of a sick or disability plan are excluded from tax. If these benefits are provided under discretionary compensation plans, the exclusion does not apply. The value of the benefit is the most important: benefits or reliefs granted from 6 April 2017 (subject to transitional provisions) through discretionary remuneration schemes are not covered by existing income tax exemptions, unless the exemption is either a “special case exemption” or an “excluded exemption”. A benefit or institution refers to anything that represents income from work, or anything considered born for the worker, regardless of the type of supply or form. Where employment-related benefits, taxable under Chapter 10, Part 3, of the ITEPA are granted to workers under an optional compensation agreement, the normal method of calculating the cash equivalent does not apply to these benefits (EIM21101 manual on labour income). The relevant amount to be considered as employment income for this tax year is the most important: if the worker receives co-life benefits (for example. B, the employer withdraws life insurance to provide death-related benefits), the exemption does not apply if it is granted under an optional compensation plan.
On January 1, 2017, the employer and the employee entered into a wage sacrifice agreement, under which the worker sacrifices part of his salary for the talent of a car. The car will not be delivered until July 1, 2017, when the employee`s salary will be reduced.