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 Salary Sacrifice and Optional Remuneration Arrangements (OpRAs)
Transitional rules have been introduced where BIK have been offered through salary sacrifice or OpRAs, such that an income tax and NIC charge will arise on the higher of the salary sacrificed (or cash option) and the value of the BIK taken.
What the benefit is will determine when the rules change. By taking the BIK, the only saving made will be in employee NICs. From 6 April 2021, all BIK are covered by these rules except for employer pension contributions; childcare provided in workplace nurseries and Employer Supported Childcare (usually by way
of childcare vouchers); cycle to work schemes; and ultra-low emission cars.
Contributing to a pension scheme
Employer contributions to a registered employer pension scheme or your own personal pension policies are not liable
for tax or NICs. Please be aware that while your employer can contribute to your personal pension scheme, these contributions are combined with your own for the purpose of measuring your total pension input against the ‘annual allowance’.
Travel and subsistence costs
Site-based employees may be able to claim a deduction for travel to and from the site at which they are working, plus subsistence costs when they stay at or near the site.
Employees working away from their normal place of work can claim a deduction for the cost of travel to and from their temporary place of work, subject to a maximum period.
Approved business mileage allowances – own vehicle
The table below shows the percentages for 2021/22. The
table is divided into two columns for cars registered up to
5 April 2020 and those registered after that date. The table reflects the differences between the new Worldwide harmonised Light vehicle Test Procedure (WLTP) and the New European Driving Cycle (NEDC) test it is replacing.
In addition, the government has reduced the percentages
which apply to lower emissions cars and introduced new performance-related bands for hybrid vehicles with emissions up to 50 g/km depending on how far the hybrid vehicle can travel under electric power.
 2021/22
 Cars registered after 5.4.20
 Cars registered before 6.4.20
 CO2 emissions (g/km)
  % of list price taxed
  % of list price taxed
  0
   1
  1
  1 – 50 (split by
zero-emission
51 – 54
55 – 59
60 – 64
65 - 69
70 - 74
75 - 79
80 - 84
85 - 89
90 - 94
miles)
 Electric range >130 70-129 40-69 30-39 <30
  1 4 7 11 13
   2 5 8 12 14
   Vehicle
Car/van
Motorcycle
Bicycle
The company car
14 15
15 16
16 17
17 18
18 19
19 20
20 21
21 22
22 23
First 10,000 miles
Thereafter
 45p 25p
24p 24p
20p 20p
        The company car continues to be an important part of the remuneration package for many employees, despite the rises in the taxable benefit rates over the last few years.
Employees and directors pay tax on the provision of the car and on the provision of fuel by employers for private mileage. Employers pay Class 1A NICs at 13.8% on the same amount.
This is payable by the 19 July following the end of the tax year.
The charge on cars is generally calculated by multiplying the list price of the car by a percentage which depends on the CO2 emissions (recorded on the Vehicle Registration Document) of the car. You then pay tax at 20%, 40% or 45% on this charge depending on your overall tax position. The tax rates applicable to Scottish taxpayers range from 19% to 46%.
For every additional 5g thereafter add 1% until the maximum percentage of 37% is reached.
    For fully diesel cars generally add a 4% supplement (unless the car
is registered on or after 1 September 2017 and meets the Euro 6d emissions standard) but the maximum is still 37%. For emissions over 75g/km if the CO2 figure does not end in a 5 or a 0 round down to the nearest 5 or 0.
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