Home Computing Initiative

Stumpy · 23 February 2005 at 3:45PM

My hubby has just been given the opportunity of "buying" a PC through this home computing initiative. Basically, from what I can tell, he chooses a voucher value, from £600 worth up to £1400, takes the voucher to, in this case, PC World, exchanges voucher for computer/peripherals and Bobs your uncle. Depending on what rate of tax he normally pays, he pays back a reduced rate each month via a salary sacrifice, ie, if he wanted a £600 voucher, he would "sacrifice" £33 per month, however, depending on his tax rate would actually only pay either £22 or £19 per month, over 18 months. Working out at a total of £400 or £354 for £600 worth of PC.

However, firstly, this seems to be only a "hire" of the equipment. Secondly, PC World tends to be more expensive than other places anyway. Thirdly, he needs to make a decision quickly, as the voucher has to be used by 16th March.

What do you reckon? Worth it? You can get a lot of PC for £600 (just bought new monitor, so only need base unit), but from their website, they don't have a lot there. I'm tempted, but not too keen on this "not owning" malarky.

frizz_head · 23 February 2005 at 5:54PM

I am currently doing this through my place of work (an IT company), and it works out at incredibly good value. We rent a PC over a 3 year period, and at the end of the period we have the option to buy the PC outright for a percentage of the purchase cost.

If you want more details Stumpy, please pm me.

Frizz

trafalgar_2 · 23 February 2005 at 5:56PM

Hi Stumpy,
I'm moving this to the 'Techie' board as I think it will receive responses there:)

Stumpy · 23 February 2005 at 6:55PM

frizz_head wrote:

I am currently doing this through my place of work (an IT company), and it works out at incredibly good value. We rent a PC over a 3 year period, and at the end of the period we have the option to buy the PC outright for a percentage of the purchase cost.

If you want more details Stumpy, please pm me.

Frizz

I've had chance to have a look at the web site of the company dealing with it, and it seems that there can be differences from scheme to scheme. This one is over 18 months - which is good in that you're paying over a shorter term, but it also means that the computer is only "yours" for 18 months. They haven't stated what happens at the end of the term - just that some companies will sell the computer to you.

I think the main thing is - is a PC World computer worth it? Could I buy a similar computer elsewhere for less than the 40% saving I can make using this scheme? Especially bearing in mind that we will still have to pay another lump sum at the end if we want to keep it.

thePhilster69 · 26 April 2005 at 6:43PM

I work for a company who specialise in the Home Computing Initiative (won't say who, as this is a personal response, not a company response) and I have a computer through the scheme too.

The way the scheme works is that you pay a rental out of your gross salary (the "salary sacrifice" you refer to) and as you then effectively earn less money, you pay less tax, meaning the computer comes tax free. The employer can also reclaim the VAT on the items, making the computer VERY cheap.

Say you earned £1k per month, and sacrificed £50 of this to fund a PC, instead of paying tax and NIC on the £1k, you pay it on £950, and therefore pay less tax. So the £50 you've sacrificed effectively works out at closer to £30.

The rental side of things is always a sticking point for people. Basically, because it's a government tax exemption to make it easier to have a computer at home, it has to be ran as a hire agreement. I know that our company offers every member the option to either return it at the end of the agreement, or to pay to transfer the title of the goods, at a cost of around £30.

So, in the end, you get a computer, fully supported for the duration of the contract, saving up to 50% (if you are a higher rate tax payer) in the process, with the option to own it for £30 at the end.

I know this is an old thread, but just thought I'd add to it in case anyone else had been offered this sort of deal. Personally, I'd highly recommend it, and that's not just because I work for a company who specialise in it.

Think about it this way... Gordon Brown takes a slice of every penny you earn, and he's now giving you a chance to put some of that, tax-free, towards a new computer. So, why give it to him, when you can give it to yourself, your partner, your kids...

Stumpy · 27 April 2005 at 10:19AM

Thanks Philster!! We did consider it long and hard - we had a deadline which was only days after we first received the information on it. I assumed this was a government deadline, but perhaps not.

Anyway, in the end, even though we were told that we would be able to purchase the computer at the end of the term at a substantially reduced rate, we decided it wasn't worth it. The problem was twofold - firstly, the minimum amount of money we had to spend was £600 (which, for just a PC without a monitor - which we already had - was rather expensive). That wasn't a major problem - just would have got a really cool computer. However, the main problem was that we had to purchase the computer from PC World. Their selection in our local store is rubbish, and extremely expensive - so although we would maybe be saving one third of the price through the scheme, their computers are at least that much more expensive than others of an equivelant spec.

If these schemes are still going on, and you could get your computer from a decent supplier, then I would say go for it - Dell would be a good choice

Joe_Bloggs · 27 April 2005 at 10:40AM

@Stumpy
There is no practical national deadline for this scheme at present. You have identified the flaw in the near brain dead choice of PC World. This has to be put down to local management.
Restricting choice to one source such as Dell is not too intel ligent either.
J_B.

thePhilster69 · 27 April 2005 at 11:34AM

Joe's right about the deadline: this is set by the employer/scheme organiser rathern than the government, though typically, the schemes run for anything up to 4 weeks, to give people plenty of time to absorb the details and make their decisions...

Depending on the employer (who, at the end of the day, makes the decision as to what kit to offer their employees) we can offer the latest Dell, HP, Toshiba, Apple and Fujitsu Siemens kit, and as our sales and products guys are all techies, we spend quite a lot of time choosing what we feel is the best mix. But then, that's just me blowing the company trumpet!!

Shame you didn't go ahead with it, as it's a great way to get a PC for a small amount of money, but I can understand not getting excited at the thought of choosing from a PC World selection...

jonnibgood · 27 April 2005 at 2:35PM

There are lots of things to think about when entering into this scheme and its important to read all the documentation as well, one further consideration I would like to add is to think about how long you are going to stay with the company for (ie if the scheme is for 3 years, then think about whether you will stay there for that amount of time.....)

don9999 · 27 April 2005 at 3:02PM

Our company recently offered a HCI scheme, and on the face of it it looked really good. But when you start looking at the details, it's no longer an easy decision!

Choice?
You are usually only allowed to select from a limited number of items - in our case it was from 2 desktops, 3 laptops and a couple of printers. I was interested in a laptop. Ignoring the cheapest, very-basic option, the other two were strong in some areas eg. good processor and memory, but weak in others eg. small hard disk, poor graphics. However, neither machine was good in ALL areas. I'd have to sacrifice something whichever machine I chose - and I'd be stuck with it for 3 years! (although I could have tried upgrading myself at additional cost) We were not allowed to modify the set packages in any way.
Is the reduced price actually better than internet prices?
We were offered a choice from a small selection of a single supplier - Dell. But Dell prices are notoriously high, and even after a whopping 41% saving (for High-rate taxpayers) the price was still only marginally cheaper than equivalent machines elsewhere.
This fact was proven, when Dell slashed their on-line prices by several £100 just to compete with other suppliers.
Of course, the HCI prices had been fixed and the 41% saving was off an 'inflated' starting price!
Note that you will be stuck with the machine for 3 years!
It may seem like a modern piece of equipment now, but is likely to date very quickly. In a few years time, you will still be paying £30 per month (or whatever) for an old laptop! No option to swap, though you could upgrade yourself (though warranty needs to be checked).
If there is any chance of you leaving the company (either through choice or being sacked) then you will have to pay out the remainder of the 3-year agreement. And NOTE! It won't be at the reduced amount! You have to pay the FULL, pre-tax price for the remainder of the agreement. In our case, if we leave the company within the 3 years, we'd ending up paying a very hefty price for the equipment!

So...the benefits...? Well, I guess you don't have to pay a lump sum - £20 or £30 per month from your salary will bea easier than finding £800 or whatever in one go. Also, there is likely to be good warranty/support agreement - in our case it was 3-year on-site.

Personally, I've decided not to join the scheme. I'd rather buy a laptop to my own specifications, from my chosen supplier. I'd buy it interest-free for 6 or 9 months (on 0% credit card), probably keep it for a year or so; then sell it (of course losing several £100 in the process). I'd then consider buying another one, with current top specifications and repeat. In my opinion, better than being stuck with an outdated laptop.

Cheers,
Don

Home Computing Initiative

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