Finance (No.2) Bill 2006 — Income tax exemption for computer equipment — rejected — 5 Jul 2006 at 15:15

The majority No voters rejected an amendment^[1] to the Finance (No. 2) Bill 2006. The amendment would have stopped the removal of an income tax exemption for computer equipment which was proposed in the Finance Bill^[2]. However, the amendment was defeated.

The original aim of the exemption was to promote household computer use by encouraging employers to loan computers to employees.

Julia Goldsworthy MP explains her reasoning for keeping the exemption as follows^[3]:

• 'Half a million people have benefited from the scheme, and many family members, as well as employees, now have access to a computer at home as a result. In particular, people found the kind of support provided through the scheme particularly helpful and reassuring.'

However, Dawn Primarolo MP argues for removing the exemption as follows^[4]:

• 'The home computer initiative has been used extensively by groups whom we would not generally expect to experience difficulty in accessing information technology. Twenty-five per cent. of participants in the scheme are higher rate taxpayers, more than twice the proportion among taxpayers as a whole. Furthermore, nearly a third of participants are employed in white-collar industries. In March, the Low Pay Commission published the findings of its review of benefits in kind, salary sacrifice schemes and the accommodation offset. It found that take-up rates were often low and that many part-time low-paid workers would gain no advantage from salary sacrifice schemes for home computers and other benefits in kind. The analysis shows that those who can afford to do so have the computers and those who cannot afford to do so, do not. The recommendation was, therefore, to refocus—not to amend—the scheme.'

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• [1] Julia Goldsworthy MP, House of Commons, 5 July 2006
• [2] The amendment was to remove Clause 61 from the Bill (pdf document - scroll to page 58). As you will see Clause 61, in turn, removes section 320 from the Income Tax (Earnings and Pensions) Act 2003.
• [3] Julia Goldsworthy MP, House of Commons, 5 July 2006
• [4] Dawn Primarolo MP, House of Commons, 5 July 2006

Debate in Parliament | Source |