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The Forum of Private Business (FPB) has criticised the Chancellor's decision to cancel the tax exemption on computers loaned to employees for private use.
The FPB says that abolishing this scheme contradicts the Government's agenda to promote IT skills.
The Government launched the Home Computing Initiatives scheme in 1999 to encourage employers to lend computers to their staff in order to promote computer literacy and home-working skills. However, HMRC has announced that from next month computers lent to employees for private use will be taxed as a benefit in kind.
Investing in technology
Nick Goulding, Chief Executive of the FPB, pointed out that a joint survey carried out a few months ago by the FPB and the Finance and Leasing Association (FLA) showed that small and medium-sized businesses put computers at the top of a list of assets they intended to acquire. Forty per cent of the businesses responding to the survey said they expected to invest in computer software in the next 12 months. The survey also found that information technology makes an important contribution to productivity growth. One conclusion to be drawn from the survey was that computer skills, wherever acquired, were becoming increasingly important in the workplace.
"Encouraging employees to use computers at home can not only be rewarding and useful for them in a digital age, but it can also make them better employees," said Mr Goulding. "There is no clear line between using a computer for your own purposes and using it at work. New employees who are computer literate at home will quickly acquire whatever IT skills they need at work."
He added that while the Chancellor had announced some encouraging initiatives that might eventually be helpful to small businesses, any possible benefits mainly lay in the future.
"It is depressing to see that one of the few changes to take place immediately will have a negative effect on computer literacy and damage the move towards a highly-skilled economy that the Chancellor says is his goal."
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