A guide for individual landlords on the recent tax changes.

Whether you own 1 or 50 let properties, you need to be aware of the tax changes that have already started to take effect – and which will accelerate over the coming years.

Restricted interest

For periods before 6 April 2017, all the interest and finance charges relating to funding for a residential property business could be deducted in full from the rental income.

From 2017/18, the financial costs which may be deducted from residential property income by individual landlords are restricted as follows:

Tax year	Finance costs permitted
2017/18	75%
2018/19	50%
2019/20	25%
2020/21	nil

The landlord receives a tax credit equivalent to 20% of the lower of:

• finance costs not deducted from income
• income from the property business before interest
• total income exceeding allowances.

This tax credit is set against the income tax liability for the year (see below example).

Any unused tax credit is carried forward to be relieved against the tax payable on the property income in a future tax year. This restriction on finance charges will have the greatest impact on landlords who pay significant amounts of interest or other finance charges, and who may be pushed into the higher tax rates due to their increased taxable income.

Example

Pete lets two properties in Kent, for which he receives rent of £40,000 after deducting agents’ fees and other costs. He pays £32,000 per year in interest on loans relating to his property business. Pete also receives a salary of £35,000 from a separate job.

Pete’s tax position is shown for 2016/17 when all the interest is deductible, for 2017/18 when 75% of the interest is deductible, and for 2020/21 when no interest is deductible.

The tax rates and allowances for 2020/21 have been assumed to be maintained at the 2017/18 levels purely for the purpose of this example. They are likely to change.

Tax year	2016/17	2017/18	2020/21
Salary	£35,000	£35,000	£35,000
Letting income	£40,000	£40,000	£40,000
Interest permitted as deduction	(£32,000)	(£24,000)	nil
Net income	£43,000	£51,000	£75,000
Less personal allowance	(£11,000)	(£11,500)	(£11,500)
Taxable income	£32,000	£39,500	£63,500
Basic-rate band limit	£32,000	£33,500	£33,500
Basic-rate tax @20%	£6,400	£6,700	£6,700
Higher-rate tax @40%	–	£2,400	£12,000
Tax credit: non-deductible interest @20%	–	(£1,600)	(£6,400)
Total tax payable:	£6,400	£7,500	£12,300

Pete was a basic-rate taxpayer in 2016/17 and made a profit of £8,000 from his let properties, on which he paid tax of £1,600 (£8,000 x 20%). He also pays tax of £4,800 on his salary in that year.

From 2017/18 onwards he is a higher-rate taxpayer due to the reduction in the deduction for interest.

Although the net income from his properties remains at £8,000, in 2017/18 he pays tax of £2,800 on that income and £4,700 on his salary. In 2020/21 he will pay tax of £7,600 on his rental income, leaving him with net income after tax from his properties of £400.

Restructure

The restriction for deduction of finance charges only applies to landlords who let residential property and pay income tax on those profits. It does not apply if the property is commercially let as furnished holiday accommodation (FHL), or the landlord is a company.

To avoid this restriction, the property business could be restructured to:

• let the residential property so it qualifies as FHL
• sell the residential property and reinvest in commercial buildings
• transfer the residential property into a company the taxpayer controls.

A sale and repurchase of properties, or a transfer into a company, is likely to generate a capital gain as the transfer is deemed to occur at market value. The gain will be taxed at 18% or 28% depending on the level of the landlord’s other income.

Where an actively-managed property business is incorporated, the gain can be rolled into the value of the company’s shares – but this incorporation relief doesn’t apply in all circumstances.

Any loans attached to the property business must be transferred into the company as leaving the borrowing in the individual’s name would defeat the purpose of the restructuring.

When the company acquires the properties, stamp duty land tax (SDLT) or for Scottish properties land and buildings transaction tax will be due, including the 3% supplement.

There are several reliefs from SDLT where multiple dwellings are acquired in one transaction, or the transaction consists of a mix of residential and commercial property.

Full relief from SDLT can apply where the transaction involves a partnership of connected individuals transferring the properties to a company they control, but this is rarely found in practice.

Letting through a company

When you let property through your own company, the profits that company generates will be subject to corporation tax at 19%. When you pay funds out of the company to yourself as a salary, or as a dividend, there will be further tax and possibly national insurance contributions (NICs) to pay.

The first £5,000 of dividends you receive in the tax year is taxed at 0%. This allowance applies in addition to your personal allowance of £11,500. The exact amount of tax payable on funds you extract from your company will depend on the level of other income you receive in the same tax year.

Property trading

Most landlords hold and let out their properties for the medium to long term, as a passive investor.

If you intend to turn over your properties more frequently, HMRC can treat your property business as a trade, rather than as a property investment business. This can apply when you:

• manage properties owned by others
• buy and sell properties within short periods
• buy and renovate properties in order to sell at a profit.

When your property business is treated as a trade, the gains you make from selling residential properties will be subject to income tax at rates varying from 20% to 45%, rather than capital gains tax at 18% or 28%, (10% or 20% for non-residential buildings). You may also be required to register for VAT and pay NICs on your business profits.

Keeping records

Landlords are required to keep records of income and expenses relating to their property business which complies with the same standards and accounting conventions as other businesses, known as generally accepted accounting practice (GAAP).

Trading businesses with an annual turnover of up to £300,000 are permitted to record their accounting records using the cash basis, as an alternative to GAAP.

Under the cash basis, only transactions completed within the tax year or accounting period are recognised in the accounts. Debts owed by customers are ignored until the amount is paid. Similarly, expenses aren’t taken into account until the bill is paid.

Currently, landlords are not permitted to use the cash basis, but the government has proposed that a form of cash basis should be available to landlords with turnover up to £150,000. This change is being backdated after coming into force on 6 April 2017.

Individual landlords will be able to opt out of using the cash basis. Companies, limited liability partnerships and partnerships which include a company as a member, won’t be permitted to use the cash basis.

Contact us to discuss your property-related tax issues.

‘The end of July marks another tax deadline – for paying the second instalment towards your 2016/17 tax liability.

If you are required to make payments on account then these are calculated as 50% of your 2016 tax liability each.

The first payment made by 31st January 2017 will always be estimated as it is made before the tax year ends.

While the second payment on account, due by 31st July 2017, is initially estimated. By now you should be in a position to finalise the tax liability after submitting your 2017 tax return.

However, many people make the mistake of not preparing their tax return as soon as possible once the year ends (on 5th April) – as such they could find that they will have overpaid in July.

Also worth noting is the fact that the second payment on account will not increase beyond the initial amount estimated – so there is no disadvantage to submitting your 2017 tax return as soon as possible.’

There is still time to prepare the return before the 31st July payment deadline – please get in contact if you require any help.

Source

Making Tax Digital

 

Yesterday’s statement from the Treasury confirmed delays for the Making Tax Digital timetable. The new timeline shows that only businesses with turnover above the VAT threshold (£85,000) will need to keep digital records, will come under MTD in 2019, as they already report quarterly, with other businesses coming under MTD in 2020.

The New Making Tax Digital Timetable

• Only businesses with a turnover above the VAT threshold (currently £85,000) will have to keep digital records and only for VAT purposes. They will only need to do so from 2019. These businesses currently report quarterly.
• Businesses will not be asked to keep digital records, or to update HMRC quarterly, for other taxes until at least 2020.
• Making Tax Digital will be available on a voluntary basis for the smallest businesses, and for other taxes.

In the Treasury statement, Mel Stride, Financial Secretary to the Treasury and Paymaster General (the person responsible for MTD policy decisions), said that digitalizing the tax system is “the right direction of travel” but many have been worried about the practicalities, and so the government has listened to concerns and acted accordingly by delaying the Making Tax Digital timetable

HMRC Unleashes Super Computer To Boost Investigation Prowess

After several years of development and at a cost of £100m, HMRC has finally launched its latest weapon aimed at reducing the £36billion gap between what tax it should and does collect.

Called “Connect”, HMRC’s powerful new system has the ability to draw on information from a number of government and corporate sources to create a profile of each taxpayer’s total income.

Where this varies from the information provided by the taxpayer, the account is flagged and could result in an investigation.

Access to more information

The Connect system software takes data from a variety of sources and platforms; from Airbnb and eBay, to Visa & MasterCard in order analyse trends and patterns of behaviour.

As of September last year, they can also get information from banks and financial organisations in British overseas territories, whilst from the start of 2017, it can gather this information from more than 60 countries.

These wider powers combined with the Connect software means that your chances of being investigated by HMRC are increasing.

Protect yourself

At M J Smith & Co we can provide you with a Fee Protection Service to protect you from the costs that may arise as a result of a Tax or VAT investigation from HMRC.

An investigation could cost you money even if you’ve done nothing wrong and Connect can target anyone; a business, a director or an individual tax payer.

Contact us now and we’ll make sure you are given the ultimate protection against an HMRC investigation.

This article by Companies House is very relevant at this moment in time, M J Smith have seen several scams similar to the ones described below in recent weeks.

‘Have you ever received a letter asking for money to stay on a register, and not sure if the letter is from us? We provide advice on what to do.

Occasionally there’s a raft of letters and emails sent to people registered at Companies House claiming they need to pay a fee to remain on a register. The people sending the communications may have a register, but it isn’t the official registry for limited companies in the UK.

What does the letter or email contain?

The letter or email will more than likely ask you to pay a fee to remain on a register. Because the company may have used your Companies House registration number and other publicly available details, it can look like it’s from us – but it isn’t.

Who are the registries?

You can find a list the registries we’re aware of on our site‘

What should you do if you receive a letter or email?

If you receive a letter or email from anyone asking for a fee to remain on a register – unless you want to be on their register too – don’t pay this fee.

Read the rest of the blog item.

 

Philip Hammond has abandoned plans to raise national insurance for self-employed workers in this Parliament after admitting that it breached the “spirit” of the manifesto.

The Chancellor provoked a furious reaction from Tory backbenchers after using his Budget to announce plans to raise NI contributions for the self-employed by 2 per cent.

Mr Hammond has written to Tory MPs saying that while the changes are justified the Government has chosen not to go forward with the rise in “class 4” national insurance contributions.

It represents a huge blow to Mr Hammond and is one of the most significant Budget u-turn in modern times.

He said in the letter: “It is very important both to me and to the Prime Minister that we are compliant not just with the letter, but also the spirit, of the commitments that were made.

“In light of what has emerged as a clear view among colleagues and a significant section of the public, I have decided not to proceed with the Class 4 NIC measures set out in the Budget. There will be no increases in NICs from April 2018.”

Mr Hammond argues that in the long-term the reform remains the “right approach” and says that his Budget “sought to reflect fairly the differences in entitlement in the contributions made by the self-employed”.

Read the full article here.

Hammond is urged to ditch ‘stealth’ death tax that will rake in £1.5billion from bereaved families as Tories condemn it as a hangover from ‘sneaky’ George Osborne

• Currently, families pay Government £215 or £155 if they apply via solicitor, to get permission for probate

• Fees are set to rocket in May with new levels ranging from £300 to £20,000

• Hike will hit middle-class families passing on estates worth as little as £50,000

Philip Hammond is being urged to ditch a ‘sneaky’ hike to probate fees that will hand the Treasury a £1.5billion windfall.
The policy – which will see charges soar from just £155 to up to £20,000 depending on the size of the estate – was confirmed in the Budget this week.

Read the full article. 

Chancellor Philip Hammond described his first and last Spring Budget as one that “takes forward our plan to prepare Britain for a brighter future.”

The economic forecasts outlined by the Office for Budget Responsibility (OBR) were broadly in line with those from the Autumn Statement in November 2016.

Inflation is forecast at 2.4% in 2017, 2.3% next year and 2% in 2019. Growth is predicted to be 2% in 2017 (up from 1.4% forecast at Autumn Statement 2016) and 1.6% in 2018.

Borrowing in 2016/17 is forecast to be £51.7 billion (£16.4 billion lower than in the autumn) and public sector net borrowing is predicted to fall from 3.8% of GDP in 2016 to 2.6% this year.

Spring Budget 2017 was light on new measures with very few new announcements that will come into effect for the 2017/18 tax year. The Chancellor confirmed that from April 2017:

The Chancellor confirmed that from April 2017:
• the national living wage will be £7.50 an hour
• personal allowance will increase to £11,500 and the higher rate threshold to £45,000 (£43,000 in Scotland)
• a new NS&I bond paying 2.2% on deposits up to £3,000.

The following report summarises the announcements made by Chancellor Philip Hammond during Spring Budget 2017 on 8 March 2017.

Read the Spring Budget here.

A guide to how dividend taxation will change from April 2016.

The chancellor George Osborne wasn’t exaggerating when he said he was undertaking a “major and long overdue reform to simplify the taxation of dividends” in his Summer Budget speech.

The current dividend system was set up more than 40 years ago to avoid double taxation of profits. At the time, corporation tax was more than 50% which meant that some individuals saw an 80% tax on their dividends.

Today corporation tax is 20% (and is due to fall to 18% from April 2020) but the taxation of dividends has remained unchanged. This has provided owner-managed businesses with financial incentives to incorporate and extract profits as dividends. Osborne said the government cannot reduce corporation tax further while there are “rapidly growing opportunities for tax planning”.

So the “complex and archaic system” of tax dividends will be overhauled in April 2016 with a simplified structure and different tax rates.

The final rules are still subject to legislation but HMRC released a factsheet of how it envisages the rules will apply on 17 August 2015. The examples in this article are based on the details from the factsheet.

Changes at a glance

There are 4 main changes that will come into effect from April 2016.

1. The 10% dividend tax credit will be abolished.
2. Individuals will have a £5,000 a year tax-free dividend tax allowance. This allowance will not reduce total income for tax purposes and will only apply to dividend income.
3. Dividend income exceeding the annual allowance will be taxed according to an individual’s income tax band. Basic rate taxpayers will pay 7.5%, higher rate 32.5% and additional rate 38.1%.
4. No tax will be deducted at source; it will be paid through self-assessment.

Dividends paid within pensions funds and those received in shares from ISAs will stay tax-free.

The £1,000 savings allowance (£500 for higher rate taxpayers) due to come into effect in April 2016 excludes dividend income.

Contact us about dividend tax.

Who will be affected?

The government predicts that 85% of people will pay the same or less tax under the new rules.

The other 15% are likely to be basic rate or non-taxpayers who receive dividends exceeding £5,000 a year. This could be a business owner who receives an annual salary below the personal allowance and takes the rest of their remuneration in dividends.

Investors would need a portfolio of more than £140,000 with a 3.5% annual yield to exceed the £5,000 annual allowance.

Current rules

Dividends are paid as though 10% tax already been deducted. This 10% is called a dividend tax credit and is equal to a ninth of the dividend. For example, a £90 dividend has a £10 dividend tax credit attached to it.

For basic rate taxpayers, the 10% tax is deemed sufficient and there is no more tax to pay.

For higher and additional rate taxpayers the dividend and the dividend tax credit are added together and this figure is taxed according to an individual’s income tax band at the following rates:

• higher rate: 32.5%
• additional rate: 37.5%.

These taxpayers can reclaim the dividend tax credit from the tax due.

Comparing dividend tax systems

The government hasn’t confirmed the full details so it is not possible to fully assess the impact of the changes at present. How the £5,000 dividend tax allowance will work with the personal allowance and dividend tax rates is still an important, yet unconfirmed, detail.

The following examples assume that:

• dividends within the £5,000 allowance will count towards basic and higher rate tax bands
• the personal allowance for 2016/17 is £11,000
• the basic rate limit for 2016/17 is £32,000
• the higher rate threshold for 2016/17 is £43,000
• the people in the examples do not receive any other income or dividends.

Non and basic rate taxpayers

Hayley, John and Susan all receive £20,000 in dividends a year but have different salaries.

2015/16

None of the individuals pay tax on their dividends under the current rules.

From April 2016

All of the individuals in these examples will pay tax on their dividends from the 2016/17 tax year. However the amount of tax they will pay will differ.

	Hayley	John	Susan
Income	£8,000	£20,000	£40,000
Dividend income	£20,000	£20,000	£20,000
Remaining personal allowance	(£3,000)	£0	£0
Dividend allowance	(£5,000)	(£5,000)	(£5,000) £3,000 x 7.5 % £2,000 x 32.5%
Taxable dividend income	£12,000	£15,000	£15,000
Tax	£12,000 x 7.5% = (£900)	£15,000 x 7.5% = (£1,125)	£15,000 x 32.5% = (£4,875)
Dividend after tax	£19,100	£18,875	£15,125

 

Hayley
The first £3,000 of Hayley’s dividends fall within her remaining personal allowance and as a result are tax-free.  The next £5,000 of dividends come under the annual dividend allowance and are also tax-free. This leaves £12,000 of dividend income that will be taxed at the basic rate of 7.5%.

John
The first £5,000 of John’s dividends fall under the annual dividend allowance and are tax-free. This leaves £15,000 of dividend income that will be taxed at the basic rate of 7.5%.

Susan
Susan’s situation is a little more complicated. All of her salary falls within the personal allowance and basic rate income tax band. She has not used £3,000 of the basic rate allowance.

However, when the dividends are taken into consideration, they push Susan’s total earnings above the higher rate threshold, exposing a proportion of her dividends to the higher rate of tax at 32.5%.

The £5,000 dividend allowance is split in the following way:

• £3,000 ‘uses up’ Susan’s remaining basic rate allowance
• £2,000 falls under the higher rate.

The remaining £15,000 of dividends are taxed at 32.5%.

Higher rate taxpayers

Pritesh earns £50,000 and receives £20,000 in dividends a year.

2015/16

As a higher rate taxpayer, Pritesh currently pays 32.5% tax on all his dividends and can reclaim the tax credit.

Dividend income	£20,000
Tax credit	£2,222
Taxable dividend income	£22,222
Tax	£22,222 x 32.5% = (£7,222)
Tax credit	£2,222
Dividend after tax	£15,000

From April 2016

Pritesh will pay less tax on his dividends compared to 2015/16.

Although Pritesh earns £10,000 more than Susan a year, they both pay the same rate of tax on their dividends.

Income	£50,000
Dividend income	£20,000
Remaining personal allowance	£0
Dividend allowance	(£5,000)
Taxable dividend income	£15,000
Tax	£15,000 x 32.5% = (£4,875)
Dividend after tax	£15,125

 

Minimising dividend tax

Until the exact details of the changes are made public, approach any strategies to minimise dividend tax with caution and seek professional advice before making any decisions.

Once the rules have been finalised, we will be in a much stronger position to advise on how the changes will affect you.

Talk to us about tax planning strategies.

This guide looks at employee benefits relating to travel and how they relate to the taxes that a business is liable for:

 Source M J Smith & Co Newsletters  Accountants : Exeter

For many businesses, regular employee travel is an essential part of their operations. Whether it is generating new customers, servicing existing ones or attending conferences and other events, travelling often generates a number of ad hoc expenditures. If a company pays for these expenditures on behalf of their employees, they will have tax, national insurance and reporting obligations.

What counts as travel and subsistence?

 

Not all costs incurred while travelling will count as travel and subsistence expenses for tax purposes. It is important to know what constitutes a taxable expense and what doesn’t before your employees leave.

 

Travel refers to:

 

• providing travel to your employees
• reimbursing employees for the money they spend on travel
• accommodation.

 

Subsistence refers to:

 

• meals
• other costs related to travelling such as business calls, parking charges and tolls.

 

With regards to public transport, costs include:

 

• season tickets for employees
• reimbursement for season tickets bought by employees.

Exemptions

 

There are a number of situations which do not need to be reported. The first important exemption is that if the employee in question is paid at a rate of less than £8,500 a year, the costs of their travel do not need to be declared.

 

There is no legal requirement to count costs that are part of your employees’ regular duties (such as service engineers or delivery personnel), or those that cover their journey to a temporary workplace.

 

When it comes to private travel, any costs associated with the travel of employees paid less than £8,500 a year do not need to be reported.

 

The following private travel costs for employees and directors are also exempt:

 

• a works bus service
• occasional, non-regular taxi journeys
• temporary taxi replacements of unavailable car-sharing systems
• bicycle or cycle safety costs
• travelling to work when public transport is disrupted by industrial action
• in certain circumstances travel for employees with a disability.

 

For public transport costs, you do not have to report to HMRC if you are contributing to a subsidised or free public bus transport for employees to travel to and from work.

 

Reporting and paying

 

When it comes to calculating the costs of non-exempt travel and subsistence, and whether or not you need to deduct or pay tax or national insurance, the following rules apply.

 

Business travel

 

It is possible to apply for dispensation for your business travel expenses which means that you do not have to include them in your end of year reports. You can apply for dispensation at any time, and while it will usually take effect from the issue date, it can be backdated to the start of the current tax year.

 

If you do not have dispensation, report travel and subsistence expenses using the P9D form for those earning less than £8,500 a year, and the P11D form for directors and those earning more than £8,500 a year.

 

It is worth noting that any reimbursement to employees that goes over the necessary cost of travel will be treated as earnings. This means that:

 

• it should be added to your employee’s other earnings
• it needs to be put through payroll to deduct any tax and national insurance that is owed.

 

Private travel

 

Non-business travel, including the journey to and from work, is considered private travel and is treated differently in terms of tax and other deductions.

 

If you arrange the transport on behalf of your workers and pay for the entirety of it, the reporting is much the same as for business travel. The costs of employees earning over £8,500 and directors will need to be reported on a P11D form and Class 1A national insurance to the value of the benefit be paid.

 

If, on the other hand, the employee arranges their own travel and subsistence and you reimburse them for it, the money counts as earnings. This means that these costs need to be added to your employee’s other earnings, and PAYE and Class 1 national insurance deducted through payroll.

 

Public transport

 

As long as the public transport costs are not exempted costs, they too will have to be reported to HMRC and have any tax and national insurance deductions made. If the employee in question earns less than £8,500 annually, the costs need to be reported using a P9D form with the cost being added to earnings and all the relevant deductions being made. For higher earning employees, the P11D form should be used.

 

The cost of season tickets, whether you or your employees are paying the initial cost, you need to add this to the worker’s other earnings and put them through the payroll system.

 

Contact us if you need any assistance in working out your tax obligations.

 

Future changes

 

The travel and subsistence benefits system is likely to undergo changes in the future as part of the Office of Tax Simplification’s (OTS) ongoing look into how the employee benefits and expenses system can be improved.

 

In the 2014 Autumn Statement, the government confirmed that it will be accepting a number of the OTS’s recommendations.

 

The OTS identified a number of problems with the way that travel and subsistence expenses are taxed, and launched a comprehensive review on 31 July 2014. The aim of the review is to ensure that these kinds of benefits accurately reflect modern working patterns.

 

3 main complexities of the current system that often lead to confusion have been identified:

 

• The meaning of ‘workplace’ and ‘permanent workplace’ are often hard to fathom for employees who often need to attend more than one work location
• The ’24 month rule’ becomes hard to decipher when an employee is given subsequent temporary assignments in different locations that together add up to over 24 months
• The current definition of ‘homeworkers’ potentially covers both employees who are based at home (with no office base) and those who are office-based but are permitted to work from home.

 

The second stage of the review began in the winter of 2014 when a working group was set up to produce a new set of principles upon which to base a new system. This stage will be reported at the 2015 Budget.

 

Contact us to discuss travel and subsistence. M J Smith & Co Accountants : Exeter

By the time you read this, HMRC should already have taken your second payment on account from your bank account. That’s because the deadline for this instalment of income tax and national insurance (NI) contributions due on last year’s profits, was 31 July.

In theory, payments on account were introduced to simplify things. They would help self-employed people to put away money, so that the tax bill wasn’t such a shock for those who always seemed to forget that they would need to pay tax on their income. They also provided HMRC with much needed cashflow.

In reality, ‘payments on account’ and their bed-fellow ‘balancing payments’ confuse so many people that they are the aspects of self-assessment we are asked about most frequently.

In light of this, we’ve written this brief guide to what they are and how to reduce them.

What are payments on account?

‘Payments on account’ are advance payments towards your tax bill, including class 4 NI contributions you’ll owe for that tax year. They do not include any liability for student loans or capital gains tax.

Who needs to make them?

Anybody who files a self-assessment tax return and has an income tax bill of more than £1,000, although there are exceptions.

What and when to pay

Each payment is half your previous year’s tax bill. You pay the first half on 31 January and the second on 31 July.

What is a balancing payment?

A ‘balancing payment’ is the difference between the amount you’ve paid on account and your actual tax bill. This will be due on 31 January after the end of the tax year.

If your actual tax bill is lower than you’ve paid on account, we can ask HMRC for a refund.

How can you reduce payments on account?

There are a number of ways:

1. reduce your taxable profits
2. increase your business expenses
3. find tax reliefs you may not be aware of

Whilst reducing profits may not seem an obvious choice to many, we can help with all of these in ways that are compliant, coherent and cost-effective for you and your business.

Call us now on 01392 875 391, email enquiries@mjsmith.co.uk or complete our contact form to find out more. We are here to help ! Accountants : Exeter

I heard recently about a company that had just hired a new graduate into the sales department. After a month, he handed in his notice. When asked why, he told his manager that he found it too frustrating to work there any longer. “Your hardware barely functions. The software is hopelessly out of date, lead generation is a joke, finding stock availability is hit and miss and your staff aren’t willing to accept there are better ways of working.” He went on “Amazon and other online retailers have raised customer expectations, both for individuals and businesses. They want to be able to compare prices, check product details, see stock availability and choose delivery options, all in an instant.” “But we’re not trying to be Amazon,” said the shocked manager. “No, but your competitors are,” was the response, and with that the graduate left the building.

Harsh words indeed. But how true were they? Was the company really not up to speed with its IT? Were they lagging behind their competitors? And how could they find out what they needed?

If the company had come to us, we could have helped to evaluate what they had and what they needed. After all it’s something our experts do a lot of. In many cases it doesn’t take us long to discover that they often don’t need the expense of a whole new system as we frequently find that a few updates, some de-bugging, staff training on the software (which usually reveals they already have a whole host of features that no-one had discovered) and the services of a different delivery company (sourced online, or course, after checking prices and reviews) is all that is needed.

IT is one of the few instances where the phrase “If it ain’t broke, don’t fix it” doesn’t apply. This is because fixing IT is a continuous process. If your hardware is struggling to process even the simplest task or your software can’t seem to provide you with the extra information you need, it could be time for an evaluation before it – and your business- faces the Blue Screen of Death.

Call us on 01392 875 391, email enquiries@mjsmith.co.uk or complete our contact form to arrange a meeting.