The definition of "employment income" for tax credit purposes has been changed, under provisions introduced by The Tax Credits (Miscellaneous Amendments No. 3) Regulations 2004, so that home computers are not included if they are exempt from tax. Computers provided for employees' personal use are exempt from a tax charge where the amount that would otherwise be chargeable to tax in a tax year does not exceed £500.

This change removes the disincentive from entering into a salary sacrifice scheme under a Home Computer Initiative that exists because the employee's tax credit payment would be reduced.

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...back to 15 October 2004

Sources:
www.inlandrevenue.gov.uk/si/2004-2663.pdf
www.inlandrevenue.gov.uk/si/2004-2663em.pdf