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Chancellor Gordon Brown has shocked and dismayed the PC industry by cancelling tax relief for the Home Computing Initiative (HCI).

Surprise axe for HCI in budget

The HCI, a tax exemption scheme designed to encourage employers to loan IT equipment to their staff, has been unexpectedly terminated by the removal of the tax break in yesterday’s budget.

The news will be a blow to resellers as it has provided a boost to PC demand from the business sector. Bill Joss, business development director at Evesham Technology, commented: “It is deeply regrettable that the Chancellor has reversed a commitment which had been widely understood to be in place until 2009, and the effects of this will be felt by many organisations which have geared up to support, what we had been told, was a core Government commitment to enhancing IT skills in the UK workforce. Just when the positive effects of HCI were beginning to be seen clearly, Gordon Brown has pulled the rug from under hundreds of employers and employees across the country. How this action supports the Government’s intent to deliver public services to the community digitally is beyond my comprehension; it recovers a trivial amount of lost tax and impedes IT literacy in the workforce”.

Explaining the move in his budget speech, Brown said: "Many employees have benefited from the tax exemption to get a computer into their homes, but the Government now wishes to focus support on groups with the poorest access to technology, to meet the goals set out in the Digital Strategy." However, it was not clear who Brown thinks those groups are, or how the removal of this tax break will help them.

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