Employers turn wary of tax-busting perks

Employers are becoming increasingly reluctant to invest in tax-efficient benefits such as bikes-for-work and mobile phones following the government’s decision to abolish the home computing initiative.

Barclays, which managed to rush through a re-launch of HCI just before the cut-off point on 6 April, admitted it would be more wary of introducing future tax-efficient benefits.

Patrick Bradley, reward and benefits manager, said: "We were thinking of bikes and mobile phones but since the Budget we’re re-evaluating our position."

Recruitment company Ajilon is looking to introduce a bikes-for-work scheme for staff this summer. Julie Bowen, head of organisational development at Ajilon, said: "I was horrified to hear that our HCI provider, which was part of the HCI Alliance, knew nothing about the changes that were occurring. It really doesn’t fill you with much confidence in these schemes."

She is also concerned the same may happen with other tax-efficient options. "We are obviously nervous that the government will pull the plug on bikes in six months’ time, so we’ve been in regular contact with our provider," said Bowen.

Southampton University, however, was unable to implement its HCI scheme in time. And the removal of the perk means that the university must now wait for some time before it can replace it with an alternative. Sonia Wilson, career pathways manager, said: "We were literally finishing off work for staff and were ready to launch. It has involved lots of wasted effort from human resources, procurement and people services."