Churchill Knight Blog

There has been much discussion on price recently. Specifically on forums and social networks such as LinkedIn and Ecademy; we have come across discussions on the importance of price for services and products. We decided this would be an interesting topic for the blog, as all contractors must go through the process of setting their rates.

Of course, a service/product needs to be affordable but as long as the price is within a realistic range for the benefits to be gained from using the service or product, is the price relevant?

If we imagine a scenario where one asks 3 builders to quote on building an extension to a home. If one estimates that the extension could potentially increase the value of your home by £50,000 and gets quotes for £10,000, £18,000 and £30,000. However, the builder that gives the quote for £30,000 comes with a range of mock up designs that bring unique ideas and value that you had not previously considered. The contractor shows that they have a clear plan and timeline for the project and that every part of the plan is clear in their mind and is on paper. That shows their ability to do the job in time, on budget and to a high standard. However, the other builders just present a sheet of paper detailing prices for materials used and labour cost; there is no personal interest expressed from them, but they may do a good job, you just do not know.

Is that level of trust and confidence worth £12,000 or £20,000; especially when it is to with your home?

Another example of this can be given using the Mac or PC argument. There are PC’s available that are more powerful than Mac’s for less money, why are Apple winning?

Perhaps price became a fixation of society for a number of years through post-war globalisation. Particularly through the 80’s and 90’s prices for many products and services were falling and people became proud when they got something cheap. It validated and proved that they were intelligent negotiators and showed others that they were not ones to get ripped off easily.

There is value in not buying something just because of a brand name. A designer diamond ring may not actually be as well made as a ring made by an independent specialist. The quality of the stone that one gets for the same money is may not be as good either so it is fair to question price, but only when you find something that is both cheaper AND better quality.

However, many will have learned the painful lessons in the false economy of buying cheap. Haircuts and suits are good examples here. They reflect on us in terms of the perceived value that we can bring to others so why not invest in them?

When a contractor sets their price, they should of course make it realistic but at the same time they really need to look objectively at the value that they can add and how this relates to the service that someone else will provide.

One needs to be considerate of the fact that there is not perfect information in the marketplace, so we need to be active in extolling our value to customers and potential customers through everything that we do. Our value goes beyond just the job in hand; it also extends to how quickly and concisely we respond to emails and calls. How we operate with others and how we prepare for and follow up on jobs.

How important do you think price is?

Fast Answer: £12.6 billion in 2011.

 

Unbiased have just released their annual Tax Action Report which analyses the numbers of people eligible for certain tax credits, tax reliefs and benefits and whether or not they claim them.

The headlines of the report are:

• Each British taxpayer is set to waste an average of £421 in tax in 2012.
• The biggest area of waste is tax credits – accounting for over £7.26 billion of wastage.
• 85% of Brits do not actively do anything to reduce the amount of tax that they pay.
• £88.6 billion of tax has been wasted (not claimed) over the past decade.

 

A few things spring to mind here; firstly, there is currently a huge amount of personal debt that could to an extent be helped with better individual tax planning. Secondly, if everyone suddenly became savvy to this, then what would become of the already hobbled public funds?

The breakdown is as follows:

	Area of Tax Wastage	£ Amount of Wastage
1	Income-related Tax Credits	£7.26 billion
2	Tax relief on pension contributions	£2.45 billion
3	Tax relief on charity donations	£997 million
4	Savings on Inheritance Tax	£448 million
5	Making use of Isa’s	£403 million
6	Child Benefit	£401 million
7	Avoiding penalties for late filing of tax return	£307 million
8	Savings on Capital Gains Tax	£133 million
9	Making use of Employee Share Schemes	£118 million
10	Income tax and Personal Allowances	£83 million
	Total	12.6 billion

As mentioned above £88.6 billion has been left unclaimed over the past 10 years. 2012 represents the second highest tax wastage figure in that time, with only last year’s £13.5 billion figure being higher.

As you can see from the above figures, the area of greatest wastage is on tax credits. Many people are not collecting their child tax credits, working tax credits and pension credits. Failure to claim tax relief on pension contributions alone accounts for £2.45 billion. Then in third place (bronze medal – as it’s an Olympic year) is tax relief on charitable donations.

We would be interested to get your views on this – is it a problem? On one hand this really underlines the fact that there are major issues in our tax system in the UK.  There needs to be a provision for everyone claiming what he or she is due and anything left over being a bonus. However, there is currently a huge public deficit, which would only grow if everyone were to claim.  On the other hand, perhaps the system of tax credits is good for the nation as a whole. It is possible that the majority of the people not claiming them are the people who do not actually need them, therefore is it a hidden redistribution of wealth?
A bit more worrying

85% of Brits have stated that they haven’t done anything in the past year to reduce their tax bill, and 88% of women haven’t done anything.

The reasons given for not having done anything include:

• Half believe they are already being as tax efficient as possible.
• Over a quarter (27%) of people don’t know how to go about being more tax efficient.
• 14% don’t know why they haven’t taken steps to reduce their tax liability.

 

Karen Barrett, Chief Executive of unbiased.co.uk commented, “Looking back at the last decade and the tax wastage figures in our reports, the numbers are just as shocking now as they were then. This year marks our second highest tax wastage figure on record, only marginally falling from a record high last year.

The message is clear – tax affects pretty much every one of us and with an average of £421 up for grabs for each taxpayer, we should take some time and effort to ensure that we are being as tax efficient as possible. Our stats show that a quarter of people who have taken steps to reduce their tax liability have done so by enlisting the advice of a professional adviser, such as an accountant or independent financial adviser.”

Tax can be a complex area to understand and our report clearly shows that as a nation we are struggling to be as tax efficient as we could be. The way tax impacts on our lives will differ from situation to situation but we call on everyone to ‘take tax action’ and to check whether there are any areas where they could improve their tax efficiency.

Over the past few months there have been a few cases reported in the mainstream press of high profile individuals (including those from the public sector) using the limited company structure to reduce their tax burden through disguised employment.

The most notable of these being the case of the Students Loans boss Ed Lester, who used a limited company arrangement to decrease his income tax bill by £40,000.

The PCG has responded to the spate of articles in the press, which at times have become inflammatory and directed at the one-person limited company structure itself.

PCG commented that: Making out every one-person limited company is an employee trying to avoid tax is “fundamentally inaccurate” and puts the economic value such personal service companies create at risk.

Of course, for those in the industry it is very obvious that tax avoidance of this kind is minimal. However, it is important that ministers and members of the press who do not typically have much exposure to the contractor industry also understand this and do not start making snap judgments based on outlying cases.

The PCG were quick to state that they fully supported HMRC investigating individuals who have not paid the level of tax that they should have, but that they were concerned over the tone and nature of some of the reporting in the mainstream media.

PCG’s Chris Bryce warned against populist attacks asking media outlets “not to create an orchestrated witch-hunt” against the nation’s micro businesses” – specifically limited company contractors.

The source of the outcry regarding Mr Lester was primarily due to his role as a public servant in the middle of a financial crisis. This concern was further exacerbated when a mainstream newspaper reported that up to 25 officials from the department for health could also be increasing their salary through operating via their own limited companies.

Trust issues were stretched even further when in December the Department of Health denied that any workers were paid in a way that may reduce their tax bills.

The Guardian even reported that when faced with a parliamentary question on whether DoH staff received pay as limited companies, the civil servants discussed the possibility of getting round the issue by not responding.

The Guardian included emails by the civil servant’s cautioned saying that whoever does respond that, “The department would probably want to avoid anything that implies its NPW [non-pay-rolled workers] are disguised employees”.

As we are now into the final few weeks before the IR35 forum concludes their revised approach to the legislation it would be a shame if the nature of these articles were to influence the outcome.

Over the past week Moira Stuart (the newsreader) and Ex-Mayor of London, Ken Livingston have been under scrutiny for their tax affairs. Moira Stuart for her advertising appearances for HMRC (peculiar twist). However, as she was not employed by HMRC it is difficult to see how this could possibly be viewed as disguised employment; more likely fuel for the media fire.

The Freelancer and Contractor Services Association have sent letters to 90 MPs asking them to tone down the “strong” rhetoric against personal service companies for precisely this reason.

This all heightens the importance of getting the IR35 legislation approach right. There will unfortunately be individuals who manage to slip through the net and some of them will later be caught and exposed. The focus of IR35 investigations has to remain on high-risk groups in order to get the most from the available resources.

The contractor community make a very significant contribution to the economy and without them many businesses would often find themselves outsourcing to larger, specialist agencies at higher rates. For the sake of the economy the one-person limited company must be protected.

HMRC last week launched a series of webinars and video training modules for freelancers and small business owners to give them help and advice on tax related issues.

There will be both live webinars and pre-recorded presentations in the series.

The live webinars will last 30 minutes and then will have 30 minutes for specific questions from the attendees.

Initially they have planned 6 topic areas:

• Business expenses and capital allowances
• First steps as an employer
• The Construction Industry Scheme
• Self Assessment online
• Limited companies, an overview
• How VAT works

 

The series started on February 9^th

To take part in the webinars you will need to register first, this is straightforward; just click on one of the links below and you will be taken through the process and will be emailed a link to confirm your registration.

After the webinars have taken place they will be posted up on HMRC’s website.

Here are the list of dates and times for the forthcoming webinars:

You, Self-employment & HMRC

9 February 9:30am – https://www3.gotomeeting.com/register/919848286 (Opens new window)
10 February 14:00pm – https://www3.gotomeeting.com/register/322179510 (Opens new window)
13 February 9:30am – https://www3.gotomeeting.com/register/663061822 (Opens new window)
16 February 16:00pm – https://www3.gotomeeting.com/register/179459262 (Opens new window)
21 February 15:30pm – https://www3.gotomeeting.com/register/834325342 (Opens new window)
24 February 9:30am – https://www3.gotomeeting.com/register/564843518 (Opens new window)
28 February 16:00pm – https://www3.gotomeeting.com/register/432100470 (Opens new window)

Business Expenses & Capital Allowances

9 February 15:00pm – https://www3.gotomeeting.com/register/749157622 (Opens new window)
15 February 9:30am – https://www3.gotomeeting.com/register/456824982 (Opens new window)
17 February 11:00am – https://www3.gotomeeting.com/register/908493646 (Opens new window)
20 February 13:30pm – https://www3.gotomeeting.com/register/360185366 (Opens new window)
22 February 16:00pm – https://www3.gotomeeting.com/register/386692134 (Opens new window)
29 February 9:30am – https://www3.gotomeeting.com/register/321105150 (Opens new window)

Ltd Company – An Overview

16 February 10:00am – https://www3.gotomeeting.com/register/374221638 (Opens new window)
20 February 11:30am – https://www3.gotomeeting.com/register/184215054 (Opens new window)
24 February 14:00pm – https://www3.gotomeeting.com/register/871322742 (Opens new window)
28 February 9:30am – https://www3.gotomeeting.com/register/409807414 (Opens new window)

First Steps As An Employer

22 February 11:00 am – https://www3.gotomeeting.com/register/882734494 (Opens new window)
23 February 14:00pm – https://www3.gotomeeting.com/register/951955326 (Opens new window)
27 February 13:30 pm – https://www3.gotomeeting.com/register/630561782 (Opens new window)

Construction Industry Scheme for Contractors

23 February 10:30am – https://www3.gotomeeting.com/register/801290510 (Opens new window)

Construction Industry Scheme for Subcontractors

27 February 9:30am – https://www3.gotomeeting.com/register/824983438 (Opens new window)

How VAT Works

17 February 14:00pm – https://www3.gotomeeting.com/register/425918230 (Opens new window)
21 February 9:30am – https://www3.gotomeeting.com/register/838791414 (Opens new window)
29 February 12:30pm – https://www3.gotomeeting.com/register/589760454 (Opens new window)

Having seen this I thought that it would be helpful for Churchill Knight & Associates Ltd readers if I checked on other webinars and training events regarding tax and for general contractor questions.

There seems to be a bit of a gap in the market here, but I did find a few:

Lexis Nexis run quite a few tax related webinars and training events:

http://www.conferencesandtraining.com/en/Browse-Events/tax-conferences/

Additionally the PCG have a calendar of events for contractors, these are not all run by the PCG so there may be a range of providers’ events featured:

http://www.pcg.org.uk/cms/index.php?option=com_jevents&Itemid=1270&catids=780

Again, slightly off course here but a good resource all the same for contractors and small business owners – Ecademy run boardrooms where you can meet face to face with a team of local professionals to give each other advice and support on a monthly basis:

http://www.ecademy.com/module.php?mod=club&op=bb_about_page

If you are a contractor/freelancer who contracts with one client at a time then this may not be relevant to you. However, for contractors who service multiple clients continually this is likely to be a concern of yours.

As a contractor there will always be an element of doing things for clients, which are “off the clock”. There are some clients who expect, or at least take up, a far greater amount of a contractor’s time than they should.

This makes them less profitable (or unprofitable) clients to service; unless of course you can explain this to them and they are happy to pay for the higher level of service.

I am talking about the type of client who has an email ready and waiting for you when you get up as well as one to keep you occupied late at night. One who is keen to catch up about their project on a daily basis even though you are only working 8 hours a week for them.

So what can be done about clients that become more trouble than they are “financially” worth?

 

The first step should be to try and make the relationship and the communications less frequent, more specific and more productive.

If you are receiving too many emails and calls then it may be an idea to ask the client to agree to a weekly call, which has a clear agenda and is time limited.

You could then follow up the call with an email outlining what you are working on and when, so that the client is clear on what is happening. This organised format of communications will in most cases make the relationship clearer and will encourage the client to leave you alone to get on with your work.

 

What if this doesn’t work?

If after trialling a new way of communicating with your client, things just fall back into their previous pattern and you feel that you are losing money on the client then you need to consider a few different things about them:

1)    Have they ever referred you to anyone else?

2)    Are they an active social media user that helps to raise awareness of you and your business?

3)    Would the customer be of value to your closest competitor?

4)    Is there a way that you could make the relationship profitable for you and also more beneficial to the client?

If the answer to all of the above is “No”, then it is perhaps time that you thought about terminating your relationship with the client. This should be a last resort as it could have a greater impact than purely the financial loss of their business, for example, if they decide to publicly criticise you for poor customer care.

If you answered “Yes” to any of the above then there is a chance that things can be turned around and you should make an effort to do so prior to considering terminating your relationship.

If you have got to this stage then there is nothing to lose in being frank and honest and just explaining your position objectively to your client. People are generally fair and considerate so this could lead to a resolution.

It would be great to hear some stories of how others have dealt with this situation. Please leave your story in the comments below.

As we have previously reported, it was announced in 2011 that the IR35 legislation will stand as it is through 2012. However, the current IR35 Forum review process, which is being headed up by HMRC, has clearly stated that changes are needed in the way the legislation is handled.

Much of the debate so far has centred on the targeting for investigations.

One thing that has been stated by HMRC is that they intend to start looking at a contractors business in totality rather than simply on a contract-by-contract basis in order to determine candidates for investigation.

Of course, the law still remains unchanged and contractors must be compliant on all contracts. HMRC are just saying that in order to focus their resources to best effect they will consider the bigger picture when identifying who to investigate and before engaging in an investigation.

HMRC typically look at all contracts going back 6 years and consider both the terms of each contract as well as the practical working arrangements.

There is talk of a new process, which will start with HMRC sending thousands of contractors’ questionnaires. Presumably they will only be sent to those contractors who have already been identified as being in the higher risk sectors. Then, dependent on how contractors respond to these questions an investigation by HMRC may or may not commence based on the perceived risk of one being inside or outside of IR35.

In some cases, where the response to the questionnaire is clear in showing that the contractor is in business on their own account, then this will help the contractor to develop a low risk profile with HMRC. However, the answers could also result in the contractor being determined as medium or high risk and therefore more likely to receive further investigation.

The postponed January meeting of the IR35 forum took place this Tuesday (21^st Feb 2012) so once the minutes are published then we will hopefully be able to give some clearer direction on where this is going.

We suggest that anyone who is operating outside IR35 Speak with an independent tax status advisor to review your IR35 status. Churchill Knight & Associates Ltd will be able to point you in the direction of an independent tax status advisor.

If you have any specific questions regarding IR35 then please just leave a comment below or give us a call if you would like to remain anonymous.

The Reed Group last week lost a first tier tribunal against HMRC. HMRC decided to revoke an expenses dispensation for Reed’s temps after eight years.

The bill for stands at £158 million. Unsurprisingly Reed have asked for a judicial review of the decision.

As a potted history of the case: In 1998 Reed decided to make a number of its temps who were working within several of its staffing agency subsidiaries into full time employees. At the time Reed were advised by Robson Rhodes, a partnership of chartered accountants who were bought out by Grant Thornton in 2007, that they may be able to benefit from a relaxation in the rules on travel and subsistence expenses which would allow them to offer a salary sacrifice scheme to the employees.

Reed employees were given the option of joining the Reed travel allowance scheme where they would receive a lower level of gross pay, but would gain through a tax-free scale payment based on where they worked and how they got there.

The crux of the case is the definition of a temporary worker in relation to a temporary assignment. From HMRC’s point of view, although the temp workers were only employed for the duration of each assignment, the workplaces amounted to permanent workplaces for the duration of each assignment. This means that ordinary commuting costs were not deductible.

It is also worth noting that Reed benefitted through this in terms of income tax and National Insurance Contributions.

One of the key reasons for the decision by the tribunal to side with HMRC was that the employees hardly received any of the benefits of the scheme, whilst Reed made large savings through it.

The judges stated that:

 

“Far from providing a benefit to the employed temp, [Reed] appropriated a significant part of the saving to itself; and the supposed sacrifice, however it was presented, was no more than an arithmetical adjustment whose purpose was to ensure that Reed secured the intended share of the benefit. It was not, in our view, a sacrifice in the true sense of that word.”

 

A further deciding factor was the consideration of the status of the workplaces – were they temporary or permanent?

They found that Reed had a contract of employment with its agency staff, but the judges believed that the contracts did not extend to periods when particular assignments had ended.

The judges stated that Reed were under an obligation to find opportunities to work for the staff, which temps could decline. However, they found that Reed exercised no control over the temps when they were between assignments and the contracts lacked specific and necessary detail.

 

 

“While we accept that there was a contract of some sort when the employed temp was not on an assignment, it was not a contract of employment,” they concluded.

Now the case will go for judicial review following Reed’s expressed dissatisfaction with the decision by the tribunal.

As a freelancer/contractor your individual personality is in effect your brand. With the Internet increasingly being used by potential agencies and employers to vet potential recruits and team members it is more important than ever to be in control of how one comes across.

It is not just out of fear that we should be taking care of what we do and say; perhaps it is a route to better and stronger relationships and greater success as an individual in both business and personal relationships.

During the economic crisis it is nerve wracking for many individuals who have lost their jobs as they find themselves in situations where they are effectively starting again from scratch.

What happens if you have spent you career focusing on building strong relationships with everyone around you, regardless of their status? If you always contribute effectively and concisely in meetings, if you always add value to the people who are stakeholders in the projects that you do, however small, if you listen carefully and empathise with others and support them, then; you will find that there are always opportunities for you to move in a new direction. 

Many freelancers and contractors will understand this well because they have all taken the leap of faith setting out on our own path. They know the feelings of fear that are accompany thoughts of what will happen if they cannot find a contract for a number of months.

So how does one counteract this potential risk? By building a personal brand.

Developing a personal brand is about making sure that you understand your personal strengths and focus on using them to create awareness and respect for you amongst your employers, employees, colleagues, clients and acquaintances.

Individuals who stand out as driving real value for those that they work for have a strong personal brand. They will know that they can always follow their heart professionally rather than making compromises.

Branding is often misunderstood; it is sometimes seen as a trick, a mirage that sits in front of the reality. However, branding is really about understanding your individual strengths and growing them and communicating them effectively. This is true whether you are a company or an individual.

Prior to the Internet there was a lot of branding and marketing that was about communicating something aspirational, that may not have been strictly true. However, nowadays brands are being called into check as any unmet promises are quickly made public and can be incredibly damaging.

This is the same for individuals; you cannot try to be something that you are not and expect to be successful in the long run. If you do not truly enjoy what you are doing then now is the time to quit and start again as otherwise you are going to experience a slow decline.

Instead, one must find what they love doing and put every effort into adding value to the stakeholders around us every day. It sounds hard, and sometimes it will be challenging, but surely that is a good thing; easy is boring.

Here is a blog post by Tom Peters entitled “Brand You” (http://www.fastcompany.com/magazine/10/brandyou.html) from 15 years ago on personal branding; it is a blog post that could make a serious impact on the way you think about yourself and your business.

Unless you have been involved in winding up a business in the past it is unlikely that you will have heard of ESC C16.

ESC C16 has been a contractor friendly tax concession for many years that allows those closing down a business to release the company’s assets (e.g. cash) to the shareholders and for those assets to be taxed as a capital gain, rather than a dividend. The particularly good thing about it is that there has been a tax-free allowance of £10,600 per shareholder and the balance can be taxed at 10%, instead of the dividend tax rate of between 20-25%. Until now, taxpayers needed the permission of HMRC to do this but it was almost always given.

HM Revenue & Customs has now been forced by European law to remove concessions and put tax law on a fixed statutory basis.

A major point of this legislation that contractors should take note of is that there is now a £25k cap on what can be withdrawn as a capital gain.

If you have more that you need to withdraw from the company then everything above £25k will be treated as a dividend and taxed at around 25%. If you have less than £25,000 then nothing will change for you.

These changes will come into effect on 1^st March 2012 to which any distributions made in February 2012 will still count under the old rules.

So let’s have a look at a few scenarios:

I will assume that firstly there is a sole shareholder and secondly that there are 2, as most contractors will be covered by these:

Single Shareholder with £60k cash:

Prior to 29^th Feb 2012

-      £10,600 at 0%

-      £49,400 at 10%

Total tax = £4,940

Post 29^th Feb 2012

-      £10,600 at 0%

-      £14,400 at 10%

-      £35,000 at 25%

Total tax = £1,440 + £8,750 = £10,190

That’s a £5,250 variance.

Two Shareholders with £60k total cash:

Prior to 29^th Feb 2012

-      £21,200 at 0%

-      £38,800 at 10%

Total tax = £3,880

Post 29^th Feb 2012

-      £21,200 at 0%

-      £3,800 at 10%

-      £35,000 at 25%

Total tax = £380 + £8,750 = £9,130

That’s a £4,190 variance.

So, not a bad little earner for HMRC.

For those of you who are currently in the process of winding up your business it is worth noting that any distributions made to shareholders over £25,000 after 29^th February 2012 will be taxed as dividends, even if you apply for ESC C16 treatment prior to that date.

Additionally, the Chartered Institute of Taxation asked HMRC what would happen in the case where some distributions occurred before 29^th February and some from March 1^st onwards.

It was found that the distributions before the 29^th Feb would be eligible for treatment as capital gains, whereas anything distributed after March 1^st (over £25,000) would be taxed as a dividend.

So, using the above example, if £35,000 were distributed prior to 29^th February then the remaining £25,000, which is distributed after March 1^st, would be taxed as a capital gain. However, there will still be the tax-free allowance.

We have all had days when it feels that the world (or more specifically, clients) have conspired to deliver us a multitude of problems that all need immediate fixes.

It is very similar to the old analogy of waiting for buses; problems and issues are never spaced out conveniently so that they can be dealt with methodically in a stress free frame of mind.

The worst problems usually present themselves in the form of clients calling with an accusatory tinged tone of voice or an aggressive email. It may be that software or products have suddenly stopped working or that they are not functioning as they should.

It is particularly hard to cope with when you are concentrating on your next project/contract and then receive a call from an angry client that expects an instant solution. This may mean travelling to the client site immediately or spending an extended phone call to discuss the situation to try and find a solution.

So, when contractors have problems firing on them from all angles, what is the best course of action?

Organise your thoughts

 

Try to stay calm, although emotions do come into play never respond out of emotion.

As a simple rule, never respond immediately to a confrontational email. Go for a quick walk or have a chat with someone that makes you laugh, just do something else for a few minutes to give yourself some perspective before you respond.

If you are on the phone then the pressure is greater but at least you have the opportunity to solve the problem more quickly.

Challenge yourself to diffuse the situation as nothing positive can come out of being defensive or even worse inflammatory. How we deal with crisis is a true measure of professionalism.

Go over the problem at hand methodically; write down all of the possible causes ranked by likelihood and then work with your client to agree a strategy for checking all of these things as quickly as possible.

Questions to ask the client

 

It will often feel that a client has a lack of trust in a contractor if they are telling them about a problem that they think the contractor was instrumental in causing. However, this is often not the case, if the contractor can be central to the solution then there is a real opportunity to build a stronger relationship with the client.

1)    Ask the client to explain exactly what has happened, what specific problems it is causing and what they think the root of the problem is likely to be. There is a good possibility that they picked up the phone to you before fully investigating so they may find the solution for themselves during your call.

2)    Go through your list of possible causes asking the client if anything has been changed relating to these. If you are on the phone then this will require some quick thinking. Look at linked products, configurations, data use etc.

If you get to this point where you have exhausted your initial ideas and your clients but still do not have a solution then decide the best way to solve it as quickly as possible with your client. This could be:

• A visit to the client’s site to go through everything with their team.
• Asking the client to write a brief report on the issue which you can them go through step by step with the client identifying other possible causes and solutions. Always make it as easy as possible to follow your thinking and instructions.

 

Having the client write a short report on the issue gives you some breathing space to put your other project/s temporarily on hold to concentrate on this issue.

It would be great to hear some specific examples from contractors detailing how they solved problems and managed relationships with clients under pressure. Please let us know your experiences in through the comments section below.