One IT tax change buried in chancellor Gordon Brown’s budget document will not please businesses that have adopted home and flexible working arrangements.
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In a surprise addition to his plans, Brown yesterday abolished the P11D tax benefit associated with the Home Computing Initiative (HCI), from 6 April this year.
This means that employers buying computers for their staff to work on at home will no longer be able to claim the cost against tax.
It is understood that ongoing HCI schemes which are delivered before 6 April will still qualify and all prior schemes are safe from retrospective action.
Evesham Technology, a member of the HCI Alliance, says it will lobby the chancellor to reverse his decision, and is seeking clarification as to the cut-off rules for current schemes and deliveries.
Bill Joss, business development director at Evesham Technology, said, “It is deeply regrettable that the chancellor has reversed a commitment which had been widely understood to be in place until 2009.
“The effects will be felt by many organisations geared up to support, what we had been told, was a core government commitment to enhancing IT skills in the UK workforce.”
Joss said the tax change recovered “a trivial amount of lost tax”. It has been estimated that Brown will be clawing back around £350m a year with the tax change.
Companies like BT which have invested heavily in home and flexible working for staff will be hit the hardest by the change.