Good Friday is bad day for home computing initiative

On Good Friday, the government quietly published the Finance Bill and reaffirmed plans to scrap tax breaks for the Home Computing Initiative (HCI).

Clause 61 of part three of the Bill lays out the details of the removal of the exemption, which was announced by chancellor Gordon Brown in the Budget in March.

It means that since 6 April, companies are no longer allowed to sell computers to their employees for home use, free of income tax and National Insurance liability.

The move caused outrage among unions as well as employers’ groups such as the CBI.

There were reports that the chancellor was considering a U-turn following the outcry, but a Treasury spokesman said this was not the case.

“We are still going ahead with scrapping tax breaks, but the chancellor has been in discussion with groups such as the CBI on how to manage the change,” the spokesman said.

Brown had said the abolition of the HCI would recoup the Treasury about 150m by 2008-09, but the CBI said it was a price worth paying to help build a more computer-literate society.

Sir Digby Jones, CBI director-general, said the move flew in the face of everything the country was trying to achieve on skills.

“It is difficult to square the saving to the Treasury with the commitments in Gordon Brown’s Budget speech to invest in re-skilling workers,” he said.

Pressure groups have vowed to continue to fight for the HCI despite the Bill being laid before parliament.

The current proposals do not affect schemes already under way – where computers have already been delivered to staff, or where contracts have been signed between employers and employees.

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