CIPP response to consultation on draft PAYE regulations
12 December 2017
At the end of November the CIPP responded to the technical consultation on the draft PAYE Regulations in respect of Car Data Reporting Requirements and Reporting Taxable Amounts due under Optional Remuneration Arrangements.
There was only a two week consultation period so we did not produce a survey to gather member opinion however we did put a call out through our email news distribution asking that individuals wishing to provide feedback do so either directly to HMRC or to us at Policy.
The Policy team reviewed the draft legislation and had no real issues about the legislation itself; however, we were concerned that the guidance and examples provided to employers and their agents may be misleading in some respects.
Cars and tax exempt benefits
It was confirmed that the ‘amount foregone’ for a taxable car is only the part of the salary sacrificed amount that relates specifically to the taxable car. It does not include the amount sacrificed for ‘payments and benefits associated with taxable cars’ (EIM44131). Employers should therefore apportion the full amount of the salary sacrifice (or, indeed, a cash allowance) between to the taxable car and to the tax-exempt benefits (according to the provisions of the supply contract).
There is an example of apportioning the total bundle in this way on EIM44020 (example 1) but other examples on this page that relate to taxable cars do not yet identify the issue of or apportionment. We suggested in our response to either adapting one of those examples to show the split, or to provide an additional example and it would certainly be helpful to cover this in a future HMRC Employer Bulletin.
Meaning of OpRA
The explanatory note and the preamble on the draft legislation’s webpage use the following text several times “Optional Remuneration Arrangements also known as salary sacrifice” (or similar). Unfortunately, this is misleading because the terms are not synonymous: salary sacrifice arrangements are Type A so the current text ignores Type B.
We suggested addressing this by changing “also known as salary sacrifice” to “including salary sacrifice arrangements,” (or similar).
We also received one response directly from a member who highlighted something we have been reiterating to members relating to the provision of car details when payrolling company car benefits. The Explanatory Note that accompanied the draft regs implied that the information has to be supplied from April 2018 even in cases where the car benefit is not payrolled. Whereas the correct situation is that the car details only need to be provided on the FPS where the car benefit is payrolled.
Our full response can be found within the Policy Hub under My CIPP on our website.