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Siemens makes a million bringing computing home

The government's attempts to boost the take-up of PCs through tax breaks has had problems, but Siemens says it's made the scheme work

Siemens claims to have saved nearly £1m by taking up the government's home computing initiative.

According to a report published by the technology giant this week, nearly 9,000 of its staff have joined the Siemens 'Let's Connect' scheme, which allows them to take a home personal computer as a tax-free benefit, over the last three years.

"The demand far outstripped our expectations in the first round of the scheme. We expected 1,000 applications, but we got nearly 4,000 -- a 38 percent take-up from eligible employees at that time," said Ben Debnath, Siemens head of policies and processes.

These employees have benefited by using their gross income to pay for their home PC, and Siemens has saved a total of £900,000 in national insurance contributions.

The UK government introduced the Home Computing Initiative in 1999 in an attempt to encourage companies to offer PCs to their workforce.

Under an HCI scheme, a firm can loan a PC to an employee and recover the cost over time -- typically three years -- through a reduction in the annual gross salary of the employee. Once the leasing period is over, the employee can purchase the computer at a "fair market price" which, given the rapid depreciation in the cost of PCs, is likely to be very low.

This salary sacrifice benefits the employer, which doesn't have to pay national insurance contributions on this amount. The employee also benefits financially, as they have effectively bought a PC using gross income rather than losing some of that income to tax.

Despite Siemen's experience, take up of the Home Computing Initiative has been something of a flop, and the government has been forced to repeatedly tweak the scheme in the hope of getting more companies involved.