PowerGen provides staff with cheap home PCs

Tax breaks help the electricity company brighten up its employee's evenings with a home PC and Internet connection for £8 a month

Electricity company PowerGen is to spend £2m on providing its staff in the UK with low-cost home computers and Internet access.

The Clicks@Home initiative will enable PowerGen's 5,000-plus workforce to receive a Hewlett Packard PC and Internet access supplied by the company's own ISP for an £8-a-month subscription fee. E-commerce minister Douglas Alexander has heralded the scheme as the first of its kind in the UK, intended to boost the IT literacy of employees.

Under a tax break implemented by the Inland Revenue, PowerGen will be able to claim back around £250,000 of its £2.25m investment in the computers and software that it purchases through the scheme. The Income and Corporation Tax Act 1998, which was amended in the Finance Act 1999, says that if a company loans PCs or software to its employees, the first £500 of the value of the asset is exempt from income tax, providing that the offer is made available to all staff.

Chief executive Nick Baldwin has said that the scheme is part of the company's aim to conduct all of its business online within the next 18 months. "We have been looking closely at how the best US companies are leading the way in e-commerce," he said. "Although PowerGen is ahead of many UK companies in embracing the Web, we still have a long way to go before access to the Web is a way of life."

The government's UK Online initiative has set the target for all businesses and individuals to be online within the next four years. "We are committed to ensuring that everyone in the UK who wants it will have access to the Internet by 2005 at the latest. As part of our support for this goal, we have introduced a tax break to encourage employers to lease low cost PCs to their employees," said a spokeswoman at the Department for Trade and Industry.

But current legislation makes no similar tax break provision for individuals to purchase home PCs for personal use. "If one needed to purchase a PC for reasons connected with employment, there may be some kind of tax relief, but the circumstances would need to be looked into to prove that it was crucial to their job," said a spokesman at the Inland Revenue.

PowerGen is claiming that its Internet plans have not been deterred by a security scare last year, when a freelance IT manager hacked into its Web site and exposed the names and credit card details of more than 7,000 customers.

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