Benefits - Car Allowance Optional Remuneration Arrangement (OpRA)

Matt Jennings Updated by Matt Jennings

From 27/03/2025 we have updated the car benefits to take into account that OpRA rules do not apply on cars with CO2 emissions below 75g/km.

If you already have Car benefits with salary sacrifice or OpRA applied, please check that these continue to be set up correctly

The optional remuneration arrangement (OpRA) rules do not apply to cars with CO2 emissions of 75 grams per kilometre (km) or less. Cars with CO2 emissions of 75 grams/km or less continue to be taxed on the cash equivalent of the benefit worked out under the normal rules without having to make a comparison with the salary foregone.

https://www.gov.uk/guidance/optional-remuneration-arrangements-480-appendix-12#cars-available-for-private-use

In order to facilitate this, when a car benefit is set up where an optional remuneration agreement applies, you will need to set up two different types, one for cars with CO2 emissions under 75g/km, and one (or two) for those what are over.

Optional remuneration arrangements are arrangements where the employee gives up the right, or the future right, to salary (known as salary sacrifice) or the right to some other form of salary or cash pay in return for the benefit.

There are three types of salary sacrifice benefit for car allowance:

  • Salary Sacrifice
  • OpRA type A (where the employee gives up some salary)
  • OpRA type B (where the employee give up an additional payment)

Where the CO2 emissions are 75g/km or under, Salary sacrifice should be used. This will ensure that the calculated BIK value does not apply the OpRA rules and equal the payment that has been deducted where that is higher

Where the CO2 emissions are higher than 75g/km, OpRA type A or OpRA type B should be used, and normal OpRA rules will apply

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