Computers@Home Scheme

broin

Hi, I've not posted on the site before so I'm not sure if this is the right section to post this or if it's been discussed elsewhere already. Sorry if I've got it wrong.

My partner is a teacher and she's been sent details of the Computers@Home scheme run by her borough. It seems like a pretty good deal to me - they lease you a computer for three years, they take 1/36th of its price out of your monthly salary over that period and you don't have to pay the income tax on that part of your salary. At the end of 3 years you have the option to buy it for its market value which they estimate will be £20. Using the figures quoted by the council, this means that we could lease, for example, an £800 computer at £22.99 a month which, with the tax benefits and the £20 purchase fee, would mean that its actual cost would be £574.40.

My dilemma is this: given that the computer has to be purchased from PC World and is therefore probably overpriced in the first place, would we get a better deal by buying a new or secondhand computer from somewhere else? As we don't have the cash to buy a computer at the moment I think it'd be better to go with the Computers@Home scheme but any advice anyone here has to give would be greatly appreciated!

Joe_Bloggs

This is probably better described as the Home Computer Initiative or HCI.
There is a similar scheme for bicycles.
Try this link
http://www.knowledgenetwork.gov.uk/oee/hci.nsf/0/7908C3347218272C80256E0F0041F265?OpenDocument

andy88_2

Given that it constitutes interest-free credit and has the tax allowance attached, it will be difficult to beat if you wish to buy at that level. PCWorld is not as uncompetitive as you think, and will certainly not overprice things by 30 to 50%.

You will find lower-spec new and secondhand computers starting from £250 new, giveaway 2nd-hand.

Are there options of other computers in the scheme? Or can a self-bought computer be claimed as an expense against tax?

Browntoa

mine was £637 via the scheme as against £1102 full price, I did shop around and found it cheaper elsewhere than the Full quoted price but nowhere near the price I ended up paying

HLK

Does this involve a 'salary sacrifice' arrangement & affect your pensionable salary ?

broin

Hi everyone, thanks for responding to my message.

Mr Skint - Both of our credit cards are already overstretched so I don't think we want to buy a computer on credit. Also, with this scheme we'd be making the payments over 3 years rather than 9 months so it'd be more expensive for us in the short term.

Andy88 - My partner can't claim expenses so I don't think we can buy elsewhere and claim it against tax as you suggest. Thanks for pointing out that the PC World mark-up won't be as much as the saving we'd make buying through the scheme. I hadn't thought about that!

Browntoa - That's a huge saving you made, how did you manage that? I think we'd only be able to make that sort of saving through this scheme if my partner was on a higher rate of tax which (thankfully) she isn't.

HLK - Yes, it does involve a 'salary sacrifice' but according to the FAQ pension contributions "will continue to be based on your pre-sacrifice gross salary". Pensions are a bit of a mystery to me so I can't work out if this is a good arrangement or not - any thoughts?

user1234_2

HLK wrote:

Does this involve a 'salary sacrifice' arrangement & affect your pensionable salary ?

Work related questions best answered by the TUC (http://www.worksmart.org.uk/rights/viewquestion.php?eny=678)

Can a Home Computing Inititative scheme affect my pension?
The scheme may have a very small effect on some people’s pensions, although your employer may be able to make up the difference. It will make a difference if you are a member of a money purchase scheme to which your employer makes a contribution based on your salary, or if you are a member of a salary related scheme that is based on your earnings every year, rather than your final salary when you retire. However the effect is likely to be very small, and will depend on how your employer operates the scheme. You should ask before taking up the scheme.

But like they said the effects will be small (some schemes quote a few pence a week) and it all depends on your pension type and how the scheme is set up.