Website Expenditure 

 
Grange Associates Ltd - 12 September 2012

The costs of acquiring, developing and maintaining a business website need to be treated in one of three ways, depending on the work being undertaken.

Domain Name

The cost incurred in purchasing a domain name for a business website is capital expenditure and is non-deductible.  So the domain name must be capitalised but is not depreciable.

However any annual fees for renewing the registration of the domain name are allowed as an expense in the year they are incurred.

Website Development

The cost of developing and building a business website is capital expenditure, as the HTML and other programming that makes up the website is treated as a computer software program.  Consistent with other computer software, it can be depreciated at a rate of 50% diminishing value or 40% straight line.

Any major reconstruction or functional improvement of the website once it is established would also be considered website development and therefore would be capitalised and depreciated.  This would include adding sales capability to a website, upgrading the software used or changing the layout and function of the site enough to be considered a reconstruction, rather than just ongoing maintenance.

Website Maintenance & Webhosting Costs

Ongoing costs of updating, maintaining or adding information on a website are deductible as revenue expenditure. 

This would include updating the content of a web page, adding content to a page, correcting minor errors and minor style or format changes.

The ongoing costs of renting space from a webhost to host the business website are also deductible.

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