EMPLOYEE BENEFITS
Limited awareness of tax breaks for home computing
Only 14% of employers are aware of the government tax incentives designed to increase home PC ownership, according to a survey by the Institute of Directors (IoD) in association with the Office of the e-Envoy.
In fact fewer than half of organisations which already loan PCs to their staff have actually heard of the tax break that is specifically designed for their circumstances.
Other key results include:
What is a salary sacrifice?
The Inland Revenue defines salary sacrifice as follows:
"A salary sacrifice happens when an employee gives up the right to receive part of the cash pay due under his or her contract of employment. Usually the sacrifice is made in return for the employer’ s agreement to provide the employee with some form of non-cash benefit. The sacrifice is achieved by varying the employee’ s terms and conditions of employment relating to pay.
Salary sacrifice is a matter of employment law, not tax law. Where an employee agrees to a salary sacrifice in return for a non-cash benefit, they give up their contractual right to future cash remuneration. Employers and employees who are thinking of entering into such arrangements would be well advised to obtain legal advice on whether their proposed arrangements achieve their desired result."
To find out more go to www.inlandrevenue.gov.uk/manuals/senew/SE42774.htm
| Government relaunches home computing initiative |
| The government has recently issued new guidelines for employers on its home computing initiative designed to encourage home ownership of PCs. The new home computing initiative (HCI) guidelines contain:
|
| Tax-free home computers The guidelines aim to help British businesses and public sector organisations take advantage of the £500 annual tax exemption on loaned computers introduced by the Chancellor in the Finance Act 1999. The exemption enables companies to loan computers to their employees as a tax-free benefit. By loaning computers to employees businesses can offer them a valuable benefit which at the same time helps to maximise organisational performance through improved ICT skills. When compared with purchasing a computer out of taxed income, the employee saves tax and national insurance -- so employees typically obtain additional savings of at least 30% -- and the company saves employers' national insurance contributions. |
| More details Copies of the guidelines are available by phoning the DTI publication line on tel: 0870 150 2500 or via the web at www.dti.gov.uk/hci To read the full press release online visit www.cabinet-office.gov.uk/news/2004/040119_cominit.asp |
Want to know more?
Title: Salary Sacrifice and IT Skills: An IOD survey, Institute of Directors, 2004.
Methodology: The IoD ran an online survey on salary sacrifice and IT-related issues during December 2003.
Survey sample: A total of 365 responses were received: only a fifth were from people involved in large companies with over 250 employees 55% were from companies with fewer than 49 employees.
Availability: You can download the 10-page survey, free of charge, in PDF format from the IoD web site. Visit the Institute's press office at www.iod.com/pressoffice and click on the press release dated 27 January 2004.
To find out more about the IoD go to www.iod.com
Posted 19 February 2004