FTI Consulting

The purpose of this Practice Note is to summarise the key requirements for implementing salary sacrifice arrangements (also sometimes, more recently, referred to as optional remuneration arrangements). This Practice Note is written in partnership with Lewin Higgins-Green of FTI Consulting.

This Practice Note is intended to provide an overview of the Optional Remuneration arrangement (OpRA) rules introduced from 6 April 2017 which affect the way in which the taxable value of benefits-in-kind provided by employers to employees is calculated in circumstances where the employee has either given up the right to receive alternative cash (or other earnings) in exchange for a benefit, or has been given a choice between receiving cash (or other earnings) and a benefit. This Practice Note is written in partnership with Lewin Higgins-Green of FTI Consulting.

A salary sacrifice involves an employee giving up a right to receive part of their cash salary in exchange for a defined non-cash benefit. Once a salary sacrifice scheme (also sometimes known as an optional remuneration arrangement) is established, clearance can be obtained from HMRC as to its impact for tax and National Insurance contributions purposes. This is an example letter to be sent to HMRC in order to obtain such clearance. This Precedent is written in partnership with Lewin Higgins-Green of FTI Consulting.

A salary sacrifice involves an employee giving up a right to receive part of their cash salary in exchange for a defined non-cash benefit. This is a precedent letter from the employer to the employee inviting the employee to enter into the salary sacrifice arrangements (also sometimes known as optional remuneration arrangements) and explaining the consequences of such an arrangement on the employee’s contract of employment and the next steps should the employee wish to participate. This Precedent is written in partnership with Lewin Higgins-Green of FTI Consulting.

A salary sacrifice involves an employee giving up a right to receive part of their cash salary in exchange for a defined non-cash benefit. This is a Precedent letter from the employer to the employee acknowledging the employee’s agreement to the salary sacrifice arrangement (also sometimes known as the optional remuneration arrangement) and explaining its effect on the employee’s cash salary. This Precedent is written in conjunction with Lewin Higgins-Green of FTI Consulting LLP.

A salary sacrifice involves an employee giving up a right to receive part of their cash salary in exchange for a defined non-cash benefit. This is a precedent letter from the employee to the employer confirming their agreement to the salary sacrifice arrangement (also sometimes known as an optional remuneration arrangement). This Letter is written in conjunction with Lewin Higgins-Green of FTI Consulting LLP.