Reading the budget text it looks like the Home Computer Initiative has been shut down.
Does anyone have any comments on this?
How is this likely to effect people already loaned computers through the scheme?
James
James Snowsill
Replies (17)
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Yes - that's right
James,
As it stands Budget Note 30 confirms that the tax exemption used for HCI schemes is to be withdrawn from April 6 2006.
We have spoken to the HMRC Employers helpline for clarification and been told the following:
All machines loaned to employees before April 6 will be allowable. Any new computers loaned after April 6 will be treated as Benefits in Kind.
So current employees taking part will be OK, but no new employees will be able to take part.
So unless something changes HCI will be finished.
Jon Stanton
Peters Elworthy & Moore
Big story - Thank you gents!
Once again, the AccountingWEB Budget monitors come up trumps. I've been occupied elsewhere, but this news will be a kick in the teeth for the PC industry.
I'll follow up for Thurday's IT Zone newswire and see if I can get any further information.
John Stokdyk
Technology editor
AccountingWEB.co.uk
Unofficial confirmation
Eb, James and Jon are correct in their initial interpretations, according to what I was told by an HMRC spokeswoman, who said existing loans would not be affected.
Granted, this hardly represents a solid legal confirmation but she referred to the two-week window as a way of mitigating the effect of the measure and sounded very encouraging about the idea of people haring off to take advantage of HCI before the scheme ends.
John Stokdyk
Technology editor
AccountingWEB.co.uk
Surely someone at HMRC knows!
Surely there was someone senior at HMRC who can give the definitive answer to this - it is somewhat important to any of our staff who wants to buy a PC before 6 April 2006. What do we advise them for goodness sake!
gives you confidence (not)...
Don't you just love it. The Chancellor removes the scheme when, at the same time, the DTI are promoting it.
Classic "joined up government thinking".
Not.
'made available'?
We haven't seen the proposed change to section 320 yet, so we don't (and probably won't before 6 April) know whether having a loan agreement in place will be enough.
You're currently not in the exemption unless equipment is 'made available to the employee'. Entering into a loan agreement without actually making a PC available before 6 April would not obviously qualify. And in view of the inconsistent responses of the helpline over the last day or two, I think I'll tell my clients to ensure the PC is in place with the loan.
Existing scheme members are OK
http://www.hmrc.gov.uk/news/home-computer.htm
The above link clarifies the position for existing schemes and partly delivered schemes.
Existing scheme members will benefit from the tax exemption, as will anyone with an agreement in place - whether or not the equipment has actually been delivered.
Jon Stanton
Peters Elworthy & Moore
www.pem.co.uk
Confirmation from the helpline?
I spoke to the Employer Helpline this morning to clarify specifically the point on existing PC loans and was told that the exemption will not apply after 6 April.
The FT and the Guardian's budget analysis say that existing loans will be protected, but don't say how they know.
Bicycles?
Does anyone know if this change will affect the tax exemption on loans for cycles the cycle-to-work scheme which also work in the same way as the HCI?