Fleet decision-makers have been urged to closely study the impact of newly introduced Optional Remuneration Arrangements (OpRA) rules to ensure the tax changes do not detrimentally impact on employees and their business.
ACFO deputy chairman Caroline Sandall, director of ESE Consulting, said there was “a ripple impact” across car salary sacrifice schemes and car or cash allowance programmes as well as impacting on employee car ownership schemes and so-called optimised cash allowance schemes that utilise Approved Mileage Allowance Payments.
Essentially the new rules were designed to mean employees opting for a salary sacrifice arrangement or taking a company car in lieu of a cash alternative paid tax on the higher of the existing company car benefit value and the salary sacrificed or cash allowance given up. However, car arrangements in place before April 6, 2017 are protected until April 2021 and ultra-low emission vehicles (ULEVs) – currently those with CO2 emissions of 75g/km or less – are exempt from the regulation. 
The impact of the changes are still coming to light and it was recently revealed that the new OpRA rules should only take into account the amount of salary sacrificed for the car itself thereby excluding vehicle maintenance, insurance, new tyres and roadside breakdown and recovery for example.
That means that the finance rental for a car and all other costs should be separated out with Ms Sandall saying that “proportionality” was now an issue for fleet decision-makers to consider in respect of OpRA.
Existing legislating stops such connected benefits as vehicle maintenance, insurance, new tyres and roadside breakdown and recovery from being taxed as a benefit-in-kind when employees were provided with a company car.
As a result, the minutiae of the OpRA legislation has now left tax experts expecting to discuss with HM Revenue and Customs how apportionment on a “just and reasonable basis” could be achieved when salary was sacrificed for a car benefit where part of the package was subject to the new OpRA rules and the other part was not under existing tax-related legislation.