Craig Murphy highlighted this article from yesterdays Times, which flags up a change in the tax rules brought in by the recent budget. Whilst in computing terms most coverage concentrated on the loss of the Home Computing Initiative that encouraged home computer ownership by offering a tax break on the purchase cost, in some ways this part of the finance bill has the potential to be much more worrying.
Effectively the move seems to be going after companies that give employees a computer as part of their job, which then also gets used for general usage. For example a salesman or consultant that is given a laptop, and then at night uses his laptop at home for personal stuff, maybe checking his hotmail account, or doing a bit of online banking, essentially removing the need for a home computer. Under the new rules, this would be regarded as a benefit, and both the employee and the company taxed accordingly.
The issue to which the article in the Times alludes is that the legislation states that computers are exempt if usage is ‘not significant’, so it entirely depends on where you draw the line, and what you define as personal usage. Certainly with the fairly vague definition given in the legislation it has the potential to be a massive minefield for employers and employees, with the possibility that someone sending personal e-mails from a work computer could land both themselves and their company with a tax bill, depending on the definition of significant usage. Certainly whether it does end up being a tax on e-mail or not, it seems like a great opportunity to grab a nice lot of extra cash for the Treasury, and one that up until now has sneaked under the radar of most commentators.
The amusing thing is that now the government is now backtracking, saying that the chances of having to pay the tax are virtually zero – but if that is the case, as Craig says why bother to bring in the rule at all?