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
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
However any annual fees for renewing the registration of the domain
name are allowed as an expense in the year they are incurred.
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
Website Maintenance & Webhosting
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.
All information is correct at the date of article
publication. Please note we provide the information as a service only. Accordingly, the contents are
not intended as a substitute for specific professional advice and should not be relied upon for that
Back | Print this page