BusinessCompany NewsTax benefit axe ‘will lose profession millions’

Tax benefit axe ‘will lose profession millions’

Cancellation of computer loan scheme threatens revenues

Accountants are set to miss out on millions of pounds in fee revenues due to
the abrupt cancellation of the tax benefits of the employee computer loan scheme
in the Budget.

According to calculations by Accountancy Age, and IT accounting
not-for-profit organisation IAAITC, at least £6m, and possibly up to £10m, of
fee revenues will be lost to accounting firms following the ending of the tax
incentives of the Home Computing Initiative by the government last week.

Dave Reynolds, chief executive of the IAAITC, said the DTI had encouraged him
to recruit 100 accounting firms into offering HCI services to clients over the
next three years. ‘I had a letter from DTI minister Alun Michael just a few days
before the Budget that made no suggestion the scheme was going to end. We’re
gobsmacked.’

Reynolds also bemoaned the amount of time and money wasted by accounting
firms on setting up schemes for clients. He raised concerns that the
cancellation would discourage the profession from getting involved in
government-based strategy.

The fallout has affected the accounting institutes. ICAS has been forced to
cancel an impending HCI scheme for its staff.

Stephen Slater, partner at Newcastle-based firm RMT, said that he had focused
heavily on implementing the scheme with clients. ‘For RMT, a lot of work has
gone into educating the business community.’

The Treasury has predicted the cancellation of the scheme’s tax relief would
net the government £300m over the next three years.

The Department of Trade and Industry said the scheme ended because it was not
increasing the access to IT among employees. Instead,

it argued that the scheme was being abused, with employees purchasing second
computers or other electrical equipment instead of PCs.

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