Budget Resolutions 2006 — Remove Income tax exemption for computer equipment — 28 Mar 2006 at 22:00

The majority Aye voters passed a measure to remove the income tax exemption for computer equipment.

In 2003 the government passed the Income Tax (Earnings and Pensions) Act. Section 320 of this Act gave an income tax exemption for computer equipment. The aim of this measure was to promote household computer use by encouraging employers to loan computers to employees.

In the debate the government chose to remove this exemption for the following reasons^[1]:

• 'The changes have been made to ensure better targeting of resources to meet the Government's objective of improving access to technology. The home computer initiative was never intended to subsidise those who can already afford computers. Exemptions were being used, contrary to the original intention, for second personal computers and, indeed, for games consoles. There has been a huge fall in computer prices since 1999, and the Government want to focus resources on those who would not otherwise be able to gain access to a computer to increase their IT literacy skills. In addition, computer ownership has risen from 28 per cent. to 60 per cent.'

However, both the Liberal Democrats and Conservatives were against the motion^[2]:

• 'I hope that he will say that my party will vote against resolution 26 on income tax and computer equipment, which withdraws the tax allowance to encourage employees to work from home... the relief was introduced only three years ago by the Chancellor, and it hits a number of buttons. It promotes a better work-life balance, reduces the need to commute and travel into the office, and promotes a wider understanding of IT through having more equipment in the home. I cannot understand why, at two weeks' notice, against a background of the Department of Trade and Industry promoting the scheme on its website, it is suddenly to be withdrawn.'

This measure eventually became law on 19 July 2006 when the Finance (No. 2) Bill 2006 received Royal Assent.

The Finance Bill set the government's budget for the 2006/2007 financial year.

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• [1] Des Browne MP, House of Commons, 28 March 2006
• [2] Sir George Young MP, House of Commons, 28 March 2006

Debate in Parliament | Source |