Medlar on 1/5/2006 at 09:11

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Yet another crazy tax by the dour Chancellor Brown! Not only will you get your IT use monitored but pay for it as well!

EMPLOYERS could be forced to police their staff’s use of office computers or risk facing a punitive new stealth tax on themselves and their employees, The Times has learnt.

Tax lawyers and Opposition MPs are seeking urgent clarification of the scope of new taxes on business computer equipment, which Gordon Brown introduced without fanfare in his Budget in March.

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The Treasury has played down the extent of the changes. However, the Finance Bill, to be debated in the House of Commons tomorrow, makes clear that both employers and employees will now be taxed if they use office computers for personal reasons, such as surfing the web or sending e-mails to friends, unless their personal use is “not significant”.

The new taxes are the result of Mr Brown’s controversial decision to scrap the Home Computing Initiative, a tax break that let hundreds of thousands of people buy computer equipment at cheap rates through their employers.

Under the rules that replace the scheme, office computers used in part for non-business purposes are treated as a benefit in kind, meaning that employees will have to pay income tax on them, and employers will have to pay national insurance contributions for them as well.

On a computer bought for £2,000, an employee paying higher-rate tax would face a £160 bill each year and an employer would have to pay an extra £51.20.

Anne Redston, chairman of personal taxes for the Chartered Institute of Taxation, writing in Taxation magazine, said the result could be “a new bureaucratic burden” on employers to make sure that private use of computers was kept to an insignificant level.

It was not clear what constituted an “insignificant” use, she said. On the basis of guidance from HM Revenue & Customs (HMRC), it seemed that employers would now be required to have a clear, stated policy against widespread private use of computers, which they would have to enforce with “reasonable checks”.

An alternative reading of “significant”, used in the context of rules on company vans, was even stricter, she said, and would mean virtually every computer used would face the new charges.

David Reynolds, of the Independent Association of Accountants Information Technology Consultants, said the Treasury could collect an extra £2.2 billion over the next three years if it applied such a strict interpretation of the law.

A Treasury spokesman said: “HMRC will take a practical view of what significant private use is.”


The Conservatives will seek to clarify the scope of the law in debate on the Bill tomorrow. Mark Francois, the Shadow Treasury Minister, said: “Practically, it will be extremely difficult for employers to stay on the right side of tax law unless they are given clarity. The cynical interpretation is that this is a massive tax grab.”

nickie on 1/5/2006 at 09:58

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Wonder how they would police this. If you cleared history and cookies etc, used necrofile or similar daily, apart from taking them in and tearing them apart, how on earth would they or I know what was used for what. Seems impracticable at the very least. I'll mind my language for what else I think.

As it happens, I'm regrettably currently gathering ammunition in a dispute with an ex-employee - for someone fairly intelligent, I'd have thought he'd have done the above rather than reveal exactly how much time he hadn't been working. Don't have a problem with the odd hour but a day and a half on the trot? And whatever else we need, it doesn't include Japanese car imports or car insurance quotes, downloaded music and films, hacking programs etc. etc. So not only is it very difficult to get rid of a waste of space anyway but we also get taxed for his surfing as well. Marvellous.

In the old days before broadband came to Devon and we were on dial-up payg we had an employee who came in early and surfed the net for an hour or so and then left the sodding thing on for hours. The thought of being taxed might have reminded him to turn it off. That's the only good thing I can think of.

nickie on 1/5/2006 at 12:13

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LOL. Haven't played that for a long time.

We have 5 pcs on a network -they're not set up to see each other though. Some of the work ones are also used at exhibitions where clients use the internet. Mmm. I can see problems here. Do I have to keep track of the clients as well? They're having a quiet show and do a bit of surfing. And then the pcs come back here and get put back into use. And since everyone uses everyone's computer at one time or another anyway (except mine, hands off), how would I/they work that out. It's ridiculous.

I'd be interested to know if there is some kind of logging process or how I'm supposed to keep track of what people are looking at other than looking at each pc individually. Anyone know?

shadows on 1/5/2006 at 20:42

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Medlar, could you give a link for that story?

Medlar on 1/5/2006 at 22:14

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(http://business.timesonline.co.uk/article/0,,16849-2159286,00.html)