Are We Making The Most Of The Video Revolution?

Ever wondered if search is important for video?
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In November of last year, YouTube surpassed Yahoo for the first time in total U.S. search queries, making it the second largest search engine, surpassed, only, by its owner, Google.

Since then, YouTube has continued to dominate the search space in respect of the total number of search queries.

When you think that all the searches on Youtube are users looking for video content in particular, there is no doubt that YouTube is THE largest video search / discovery destination.

In October, 2009, there were more than 3.7 Billion search queries on YouTube as measured by comScore. This represents and increase of more than 31 percent year on year (vs 2,580,000.000 queries in Oct. 2008) and an increase of 7% over just last month.

Yahoo, although still the 3rd largest search engine, has now fallen more than 1 billion queries per month behind YouTube.

It stands to reason, then, that anyone not using You Tube as a promotional tool could, possibly, be missing out on a vast potential audience.

This is something we, at 1st Addition, are taking very seriously, and, some time ago, we set up our own channel on YouTube, in order to showcase the key videos we use for both educational and promotional purposes (as well as one or two of our favourite humerous ones). You can check this channel out at; http://www.youtube.com/user/1stAddition

Also, in the spirit of moving with the times, wherever possible, from here on in, the key posts in this blog will now also be in video format. As well as being more user friendly, these videos will also be uploaded to YouTube, thereby increasing both our online presence, and SEO rankings, due to increased incoming traffic.

Pre Budget Report 2009. A Quick Summary

Yesterday saw Mr Darling’s second Pre Budget Report since taking office last year. So, how does it compare with last years, and how will it affect us all?

Some of you may recall that my main concern last year, as it was for most commentators, was the optimistic nature of the Mr Darling’s projections, both in terms of future economic growth and potential cost savings.

In the 2008 Pre Budget Report, the Chancellor predicted 2009 borrowings of £78bn, rising to £118bn in 2010. (Earlier in 2008, he was predicting borrowings of £38bn).

So where are we now? Well, according to Mr Darling, the Government will spend £178bn more than it earns, this year alone, with overall borrowings rising by £789bn in the next 5 years.

The concern at the moment is that these projections are based on assumptions that the economy will start to grow rapidly, and that taxes will rise, after which, the level of debt should fall. Bearing in mind the Chancellor’s ongoing history of extreme optimism, it’s not the most encouraging of plans.

Ok, but why is this Pre Budget Report so important? Well, it’s the last throw of the dice (perhaps a rather unfortunate analogy) for Labour and it will lay down some of the policies that will be used to fight the general election next year. This is particularly important, as we plough our way through the longest recession on record, when employment is on the increase, and Labour are about as popular as a fart in a spacesuit.

The Government really needs to cut spending and increase taxes if they are to tackle our current debt crisis, but that will hardly boost their popularity in the run up to the election.

So that’s where we are, but what’s the plan, and how will it actually affect us?

The Highs

Bankers’ bonuses will, effectively, be taxed at 90%. (Yes, I know that’s not a high, if you’re a banker, but I can’t help feeling it will raise an approving smile from the majority of us) The bankers, themselves, already pay tax of 40% on these bonuses, and, now the banks, themselves, will also have to pay a further 50% of any bonuses in excess of £25,000. Sounds great, but it is only expected to raise around £500 million, a drop in the £178bn deficit ocean expected this year alone.

The 2008 Pre Budget Report announced plans to allow businesses to spread their tax payments in times of financial hardship. This has now been extended “for as long as it is needed” which should avoid too many businesses going bust as a result of a large, unexpected tax demand.

The ‘Access To Credit Scheme” has been extended. This is the scheme whereby the Government guarantees borrowing by businesses, thereby increasing the likelihood of the banks lending to them.

Empty property relief (where empty properties, with a rateable value below £18,000, are not subject to business rates, as long as they remain empty) has also been extended.

The Increase in small company taxation, originally scheduled to kick in from April next year, has been suspended for a second year in a row.

In order to allow more over 65s to claim Working Tax Credits, the hours needed to work, in order to qualify for them, have been reduced.

Currently, any 18-24 year old, who has been out of work for more than 12 months is guaranteed work or training. From next month, this has been reduced to 6 months.

State pension is to increase by 2.5% in April next year.

At the other end of the spectrum, child benefits are to increase, by 1.5%, from the same date.

Interestingly, Mr Darling has given a global guarantee that anyone in work will always be better off than they were on benefits.

One piece of good news for the elderly is the announcement of discounts on new boilers, which will, hopefully, help those who struggle with the rapidly increasing energy prices.

Free school meals were announced for 500,000 children from low income families.

The Lows

VAT will return to 17.5% from 1 January 2010. Not only will this reverse the, admittedly questionable, benefit of reducing the VAT level last year, but those businesses who spent the time and money changing price lists etc must now repeat the process, once again.

As with VAT, the stamp duty threshold reverts to its previous level of £125,000.

Anyone earning in excess of £20,000 will see an increase in tax, and a further 0.5% increase in National Insurance, for both the employer and the employee.

Missed by some, the 40% tax threshold has remained the same. This means that anyone getting a pay rise this year, who is already close to this level, will now fall under the 40% income tax rate for the first time.

Spending will be capped at £32bn (the same as last year) although there are expected to be further ‘efficiency savings’. In the long term though, spending is expected to slow down.

Pay rises for Government employees are to be capped at 1% from 2011 onwards.

Plans to increase the inheritance tax threshold, from £325,000 to £350,000 were postponed until 2011. It is estimated that over 100,000 additional homes will be caught by this, as a result.

Conclusion

On the face of it, there are more highs than lows in this budget, but is it enough? The current economic climate demands immediate and dramatic action.

Unfortunately, the Pre Budget Report has been prepared by a Chancellor who (a) has a history of excessive optimism, and (b) will not want to ‘rock the boat’ too much, in the face of an upcoming general election.

Mr Darling has hinted at future tax hikes and cuts in spending, but ‘not yet’.

There are one or two popular moves, such as the super tax on bankers’ bonuses as well as some of the new greener policies and help for the youth of the country, but, once again, we have to ask; “Is it enough?” The statement that; “anyone in work will always be better off than they were on benefits” is a bold and admirable one, but is it really achievable, and, more importantly, how will it help the expected £178bn deficit this year?

Once again, it remains to be seen.

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For those of you with no life, and loads of time on their hands, we have reproduced the full transcript of Mr Darling's Pre Budget Report Speech on our web site.

Check it out at http://www.1stadditions.biz/cdata/33039/docs/2213990_1.doc

Working From Home. What Are The Implications?

If you work at or from home, the part of the property used for work may be liable to business rates (also known as non-domestic rates) whilst the remainder of the property will continue to be liable to council tax (although an alteration may be made to its banding).

To decide whether or not part of your property should be liable to business rates there are a number of things we have to consider, including the extent and frequency of the non-domestic (business) use of the room (or rooms) and any modifications made to the property to accommodate that use.

Each case is considered on its own merits, and normally The Valuations Office Agency (VOA) will visit your property to check the facts before an assessment is made for non-domestic rates.

Business rates

If your property needs to be assessed for business rates, the VOA will work out a rateable value for the part that is used for non-domestic purposes. Rateable values are based in broad terms on the annual rent for a building or part of a building if it was available to let on the open market at a fixed valuation date. Currently this is 1 April 2003

It is important to note that rateable values are a key factor in the calculation of business rates but they are not the rates bill. An increase or decrease in rateable value does not automatically lead to a smaller or larger bill because the final calculation is based on a number of other factors.

These include transitional relief and the multiplier, (rate in the pound) which is set by the Department for Communities and Local Government (for England) and the National Assembly for Wales. Local authorities are responsible for calculating actual rates bills and for collecting rates.

For more information, please contact your local Valuation Office - details are in the phone book - or visit www.voa.gov.uk and http://www.businesslink.gov.uk/bdotg/action/layer?r.l1=1073858808&topicId=1074019801&r.l2=1073859221&r.s=tl - both official government websites

Below are some examples of assessments we might make where part of a property is used for both domestic and non-domestic purposes

1. A detached Edwardian dwelling in a residential area owned and occupied by a self-employed solicitor who practices from the property, specialising in matrimonial law. The front room on the ground floor is furnished with sofa and comfortable chairs, has a TV set, and ornaments/photos of a personal nature displayed around the room. It is used on an occasional basis as a waiting room for clients during weekdays, and as the lounge by the solicitor during evenings and weekends.

The former dining room is used as an office equipped with computer, dedicated fax and telephone line, filing cabinets, desk and shelving stocked with law books. No domestic use is made of this room. It is used by a part-time secretary when the solicitor is visiting clients or attending court.

The ground floor kitchen is used for preparation of family meals, but also to make tea or coffee for clients. The first floor accommodation of bedroom and bathroom is wholly used for domestic purposes.

Conclusion: The office is the only non-domestic part and will be assessed for business rates. The main purpose of the front room is to serve as a lounge. In this instance, the non-domestic use is sufficiently minimal so as not to warrant assessment for business rates. The lounge and the remainder of the dwelling will be banded for council tax purposes.

2. An integral garage of an estate house is converted to an office with plastered walls, electric power points, solidfront, suspended ceiling and floor screed suitable for carpeting. A separate telephone line has been installed. Access is through the hallway of the house. All toilet facilities are in the main house.

The room is used by the family in the evenings and occasionally at weekends. During the day the occupier designs computer software. He is employed by a major company to work at home, because of a physical disability. All of the equipment has been provided by his company and is specially adapted for his needs. He visits his employer's office on an occasional basis for meetings with colleagues and customers.

Conclusion: The former garage is no longer domestic property. It has been adapted for office use and should be assessed for business rates. The remainder is domestic.

3.The occupier is employed as a site finder by a major building company, and travels across most of the southern part of the country, using her home as a base, but calling into the company office once a week to pick up new instructions, for meetings, and to leave completed work.
She has a four drawer cabinet in the corner of a dining room, which also functions as an 'office' for the family computer, and there is no dedicated telephone line for business purposes.
The occupier is out visiting sites four days a week, and does 'writing up' at home on the dining room table in the evenings and at weekends. No clients or members of the public visit the house for business purposes.

Conclusion: Dwelling is domestic property, and should be banded for council tax.

4. A doctor uses a room in his house as a consulting room three days a week. The main practice surgery is situated some three miles away near the town centre. The house is more convenient for patients who live locally.

A concrete ramp has been added to the front door and the door opening to the hall and the consulting room has been widened to accommodate a wheelchair. No one in the doctor's family is disabled.

In the room itself there is an examination couch which is essentially a single bed with a cotton sheet thrown over it. A paper sheet is added and removed after use by each patient.

There is no office desk as such but there is a computer, table and chair in a corner of the room, which are used by the doctor during his consultations.

No patients records are held at the house, nor are there any medicines. Basic medical equipment is kept in the doctors medical bag or stored in a drawer after use.

There is planning consent for use as a branch surgery and part of the front garden has been surfaced to accommodate two to three extra private vehicles. There are parking restrictions in the street.

On the walls of the consulting room the doctor has attached pictures painted by his young children, and there are toys in the corner of the room, which belong to his children but can be played with by young patients. There is a brass sign outside the front door to advertise surgery hours.

The remainder of the week the doctor attends surgeries at the main premises, and in the afternoons he makes house calls. Other than for consultations the room is often unused, but when friends come to stay it can be used as a spare bedroom. At weekends, and some evenings the doctor uses the room to read professional papers or watch a portable TV away from the children.

Conclusion: The principal use of this room is as a doctor's surgery, and occasional use for domestic purposes is minor. The room should be separately assessed for business rates, and the remainder of the dwelling banded for council tax.

5. A teleworker formerly employed by a large national company in a call centre now works for the company five days a week at home, using a spare bedroom to house an office desk, telephone consul, computer terminal and chair all supplied by her employer. Her hours are flexible but generally the room is used for the purposes of work at least 40 hours each week. During evenings and weekends it is used by other members of the family for leisure purposes, and by the taxpayer for doing domestic chores such as ironing. No physical alterations have been made to the property other than installation of new telephone lines, and no members of the public or work colleagues visit the house for business purposes.

Conclusion: Rateability will not arise unless equipment of a non-domestic sort is installed or the property is physically adapted for the business use. This is because the character of the room remains as domestic living accommodation, and the purposes of living accommodation may include recreational and leisure use and work. Also the taxpayer uses furniture and equipment of the kinds that are commonly found in domestic property.

OK, so why is this so important, and what are the tax implications of this legislation?

Well, firstly, for most of us who work from home, we are able to claim an element of the household running costs, based on floor area, or, more simply, number of rooms. This will include a proportion of domestic council tax for the whole property. Where a room is deemed to be used exclusively for business purposes, and is, therefore, subject to business rates, those rates will be 100% allowable, for business purposes.

On the down side, there could just be a Capital Gains Tax implication. Contrary to popular opinion, simply claiming part of your property as a business expense will not automatically mean that element of the property is subject to CGT, but you need to be aware of the criteria.

You will still be eligible for Private Residence Relief, providing you keep using all of the house as a home. In other words, if the room or rooms used have dual purpose (office and spare room, for example) or have not been modified in any way, then full PRR will still be available. If, on the other hand, you have converted your garage to a joiner's workshop, including modifications to the power supply etc, this is likely to be subject to both business rates and, ultimately, Capital Gains Tax on the sale of the property.

For this reason, it's always wise to plan your business usage claims properly, especially if there is a private usage of the room, or rooms, concerned.

Remember, there may well be other things to consider, such as notifying your insurers, landlord or mortgage company, as well as being aware of any covenants that may affect the property, and, more specifically, running a business from it.

HMRC Offers Practical Help For People Affected By Flooding

HM Revenue & Customs (HMRC) has a special Helpline for anyone affected by the recent floods, where, they say, fast, practical help and advice is available.

You can contact the Helpline on 0845 3000 157 between 8am and 8pm Monday to Friday and 8am to 4pm Saturday and Sunday.

Financial Secretary to the Treasury, Stephen Timms MP said:

“We want people to be able to concentrate on recovering from the recent events. A quick call to the HMRC helpline will give peace of mind, enabling customers to focus on restoring their homes and businesses.”

Each call to the helpline will be handled on its own merits but HMRC may be able to help by:

agreeing a revised payment schedule when customers are unable to pay due to financial difficulties caused by the flooding

agreeing practical arrangements where individuals and businesses cannot comply with their tax obligations perhaps because their records have been lost or destroyed in the flooding

reviewing any penalties or not imposing additional surcharges that may be triggered where customers have missed deadlines as a result of the flooding

providing help and advice in dealing with other practical, tax related matters arising as a result of the flooding.

The service is available for all HMRC taxes, including VAT, Corporation Tax, Income Tax and NICs (PAYE) and for individuals affected by the flooding.

Tax credit recipients are asked to continue to use the helpline number 0845 300 3900.

Businesses needing to discuss rescheduling payments as a result of the general economic situation rather than issues relating specifically to flooding should continue to contact the

Business Payment Support Service on 0845 302 1435.

Contacts

NDS Enquiries

Phone: For enquiries please contact the above department

ndsenquiries@coi.gsi.gov.uk

Reproduced from NAT 83/09

HMRC Advisory Fuel Rates Change Again

On 3 January this year, we blogged on the new HMRC advisory fuel rates. These are the rates used to calculate the VAT element of any vehicles mileage rates claimed, such as those under the Fixed Profits Car Scheme.

This original article can be revisited at; http://1staddition.blogspot.com/search?q=Mileage+rates if you want to check out the specifics.

As of 1 December 2009, these rates have, once again, changed. The revised rates are now available on the HMRC web site, at the following link; http://www.hmrc.gov.uk/cars/advisory_fuel_current.htm