Clause 79 - Exemption for loaned computer equipment
Finance Bill
9:30 am
Mr Mark Prisk (Shadow Minister, Economic Affairs; Hertford and Stortford, Conservative)
I beg to move amendment No. 59, in
clause 79, page 75, line 21, leave out '£500' and insert '£550'.
May I take this opportunity to welcome you to the Chair, Mr. McWilliam, for the challenging and exacting, but nevertheless interesting, day ahead?
The clause will extend the home computing initiative to cases where benefit would be taxable as earnings; for example, where an employee is offered a loan of a computer instead of a salary. Amendment No. 59 would change the exemption, but, as I am sure eagle-eyed members of the Committee will realise, not by a great deal—from £500 to £550. Its purpose is to establish the Government's reasoning for retaining the figure of £500, so it is a probing amendment.
As I understand it, the origins of the scheme lie in the Finance Act 1999, and the idea was to widen the availability of information technology. That goal is a good one for employees and employers alike. The £500 is a annual taxable benefit, so it translates into £2,500 as an actual capital purchase because, at that point, an asset would be taxed at 20 per cent. In 1999, that represented a reasonable cost for a home computer, printer and so on. However, in the five years since the basic standards of computing have changed, as hon. Members are aware. Computers have changed in terms of their capability, the range of peripherals that are engaged and connectivity. I know that a number of hon. Members have a particular interest in internet access and other such activities. It is internet access that particularly concerns me. Taking that into account, and the other essential back-up equipment such as scanners and printers, there is a serious question whether the taxable benefit offered is up to date with current home computing needs.