Under the OpRA rules such arrangements are subject to tax based on the higher of the salary foregone and the tax charge that would arise on the benefit. For example, if the benefit is one that is exempt from tax, the sacrificed/forgone salary would be the amount taxable (unless an OpRA exemption applies) for the arrangement, even though the benefit received is normally exempt from tax.
Certain benefits were carved out of the initial changes and deferred to become fully effective from 6 April 2021 so long as before that date the arrangements were not varied, renewed or modified from the pre 6 April 2017 arrangement. These benefits included:
Certain other benefits are exempted from the OpRA rules so that the old position effectively continues to apply to these. Amongst others these benefits include:
The OpRA exempted benefits above continue to be exempt following 6 April 2021.
The post 5 April 2021 position
From 6 April 2021, all arrangements unless specifically exempted (as above) where salary is given up for a benefit will be subject to the OpRA rules and the arrangement will be taxed at the higher value of:
An example of the change for those arrangements taking effect from 6 April 2021 is seen below: