Thursday 1 October, 2020

Does your marketing team have spare time to think about your business website and digital marketing strategy?

Post lockdown, the economy has been slowly getting back to its feet and many businesses are starting to look to the future. A good many are finding that they are still quieter than usual. Many of these businesses may have tuned down their digital marketing activities or placed them on hold.

I have written this article to help you and your marketing team kick start the redesign of your website. I’ll provide reasons to do it in the first place, look at how you might cover the costs and how that will show in your accounts. I’ll also share a few tips to get the quality right.

Are you put off by the cost of updating your website?

Over that last six months you may have given initial thought to redesigning or updating your business website. But website redesign costs might have put paid to the notion before it even blossomed.

Before you dismiss the idea completely, have you considered the latest buying trends and the benefits of designing and developing a new website?

  • Lockdown has been the catalyst for a huge amount of business to move online
  • At the same time, the economic climate has spooked many of your competitors into reducing their marketing spend
  • Marketing gaps are appearing and savvy businesses are starting to fill the voids
  • A new website can take advantage of new design features, the post pandemic digital playing field, as well as helping to invigorate your sales and marketing activities and boost team morale
  • Undertaken effectively, maintained and marketed, a business website can build its own intrinsic value. This value can increase the inherent value of the business itself

But how are you going to pay for a new website?

  • Done right, a new website can essentially pay for itself
  • Bounce Back Loans can be a cheap source of capital to invest in marketing with extended repayment terms
  • Additionally, if you’ve received a taxable grant during lockdown it may be worthwhile considering investment into business digital marketing activities

In fact, there are a number of different strategies to account for the development costs for  a new website – I’ll come back to these later in this article.

If not now, when?

Whether considering a company website designed from scratch, or a redesigning your existing website, you will naturally need to weigh up when the project should start and how to get it underway.

As a business owner, there are more than likely going to be questions you ask yourself, such as; How much of my time will I need to invest in the new website? Do I have the time to manage the project and the website designer?

Most businesses will experience peaks and troughs of activity throughout the year. For many businesses, these ebbs and flows have been exaggerated by the current physical and economic environment. Given that quieter times have recently been more frequent, working on your business website now could be a real advantage.

Quieter times also provide the perfect opportunity for you to devote time to analysing and reflecting on your existing marketing and how your audience is reacting to it, prior, during and after lockdown. This vital analysis will help provide the answers as to whether you need to enhance or change your approach to digital marketing communications and inform the development of your new website and digital marketing strategy.

The conclusions that analysis provides are useful factors to include in the development of your new website and digital marketing strategy.

How do I maintain quality while designing a website quickly?

The answer is all in the planning and preparation. Get this right and you’ll spend less time managing the project. Start by planning:

  • The new website design – look and feel
  • The website structure – our article How to plan the structure of a new website in 8 easy steps will help with this
  • The website content – what content do you need? How is the content going to sell or promote your business? Take a read through our article What are the benefits of content marketing
  • The website assets – images, videos and brand styles
  • Digital marketing – the website’s SEO and ranking should become part of your regular marketing process

Spending the time on these important stages, it will help you to quickly develop a website that truly meets your business’ needs. It will also save time in having to go over development work time again until you reach a website design and build you are happy with.

Choosing a local web designer can help

Choosing a local website design company has its benefits. The website developer will have a much more detailed understanding of your local market, than a company further afield. This local knowledge can be built into the new digital marketing strategy, making it a more successful addition to your complete business plan.

You can also meet with a local web designer for regular face-to-face meetings. This is especially important if you want to speak in more detail about the design look and feel, whilst touring your business in person.

Case Study 1: Local Accountant’s Website Design

A longstanding client of ours, Visionary Accountants, did just this. As a St Albans based accountancy firm, they wanted to use a local web design company in St Albans. They selected Tonic Fusion as their web developer to help completely redesign their web presence.

Their website content was written to ensure that it was optimised with the right SEO to ensure their local market in St Albans and the surrounding areas was able to find them online more easily.

With a design and build cost of £7,500 plus VAT, their website was developed as a Brochure Website, providing company information and sector news. It is essentially a marketing tool and there was no plan to use the website for any e-commerce or direct product sales.

Visionary Accountants, as tax specialists, know that this cost should then be placed directly on their profit and loss account, which meant that they would reduce the amount of taxable profit the firm made that year by £7,500.

Case Study 2: E-commerce Website Site

Local secure phone manufacturer, Blackphone, based in Welwyn Garden City, Hertfordshire wanted a website designed and built for direct e-commerce sales of their product, the Blackphone PRIVY. At a cost of £15,000 plus VAT their website development.

This e-commerce website solution was split into three phases:

  • Phase 1 – Initial planning and design
  • Phase 2 – Building the e-commerce website,
  • Phase 3 – Ongoing updates and changes to the website content, as well as website hosting and maintenance.

How will website development costs affect my tax bill?

HMRC account for business expenses and costs in a variety of different ways. It’s important to seek the right advice to ensure that you get the tax treatment right, take advantage of tax allowances and don’t pay more tax than you need to. The tax treatment of a website development and build costs can be quite a complex area as there are varying factors to consider, depending on the “job” your website does for your business.

For example, will your website:

  • simply act as a marketing and promotional tool for your business?
  • be an e-commerce platform from which a customer can directly purchase products?

In some cases website design and development costs would be treated as an expense and included in the business “profit and loss account”, but in others, the costs would be deemed as capital expenditure a figure to be included on the “balance sheet”.

Here are some general rules that will be applied for accounts and tax purposes when a company produces their annual accounts:

  • Website planning and design stages – Expenditure for the initial planning stages of the new website and any ongoing website maintenance charges will be viewed as an allowable business expense that is treated as a “cost” in the profit and loss account.
  • Building the website – costs associated with the actual construction or development of the website are viewed for tax purposes as “capital” and will therefore be treated as an asset  shown on the “balance sheet”.  These costs will typically be expensed in the profit and loss account as depreciation cover a three to five year period. The initial expenditure may qualify for “capital allowances”, which would be deducted from the taxable profit in the same way as other general expense. These allowances change yearly, so you will need to speak to a qualified tax accountant to ensure the correct and up-to-date allocation is applied.

We have used Visionary Accountants in the earlier case study to provide a clear example of how local businesses work with each other. And as Visionary are extremely experienced accountants they will be more than happy to answer any tax related questions you may have regarding website design and development costs - they will even provide initial guidance for website design and development tax implications free, just mention my name when you speak to them.

Is website development eligible for R&D Tax Relief?

This is a question that I have been asked on numerous occasions and one that divides opinion. Some believe that, in theory, a company would be able to apply for R&D Tax Relief on their website build, others believe that they would not. Again this is an area for expert tax advice.

In our experience, in order for a website to qualify for this particular tax relief, the website’s design and build will need to be radically advanced and prove to be a fundamental advancement scientifically or technologically. Most websites would not, therefore, be eligible for the R&D Tax Relief.

However, if you select an experienced web development and software development agency, it may be possible to forge a plan that meets R&D Tax Relief requirements.

Funding a new website – Bounce Back Loans

Recently, I have spoken to a number of business owners that have taken out Bounce Back Loans. These loans have often been taken with the intention of providing a safety net for a rainy day or supporting the business through the difficult trading.

Many businesses are sitting on the loans rather than investing in their businesses, yet a Bounce Back Loan is a perfect vehicle to fund a new website or a website redesign.

In summary

As can be seen here, there are a lot of questions that need to be answered before either redeveloping your existing website or starting a new website project from scratch.

What better way to spend the lulls in business activity than to look at new ways of being able to reach your market and sell your products or services? More so than ever, websites form an integral part of the sales and marketing process for any business.

So, if not now, then when?

And lastly, don’t forget the Bounce Back Loan opportunity. If a Bounce Back Loan can reinvigorate or kickstart your website development and digital marketing campaign, when your business most needs a shot of adrenaline, why not invest?

If you would like any specific advice on any of the topics above, please get in touch.

Author: Alec Butler
Alec is a Partner in Tonic Fusion LLP a web design and development specialist and digital marketing agency in St Albans, Hertfordshire.


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