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News - 25 March 2006

BUDGET 2006: Technology

The scrapping of a scheme designed to encourage and facilitate tax-free home computers (The Home Computer Initiative) without even informing the government department that is promoting it, is an odd signal to send out to 21st century Britain.

The scheme allowed employers to “lend” computers to staff while they purchased them over a period of three years with the money being deducted from their salaries before taxation.

It was estimated to cost the treasury about £300m per annum and some commentators are suggesting that it was axed because it was too successful with over 500,000 people taking advantage of the scheme. It seems at odds with the government’s push to get more people to use the internet for everyday transactions including filing statutory returns e.g. income tax.

The government may shift the emphasis on home computer ownership towards poorer households that are poorly represented in the digital community.

The scrapping of the scheme, literally without any warning at all, has caused consternation bordering on panic in computer companies that had invested significantly in servicing the scheme.

Evesham Computers had printed 40,000 leaflets promoting it the day before the budget and now have just 6 days to get employees signed up before the April 1st deadline.

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