Claiming website development costs

If you incur expenses creating or maintaining your business’ website, you may be able to claim some of these costs as a deduction in your tax return.

  1. Capital expenditure

You might be able to claim costs incurred before you start up your business over a 5 year period after your business starts up (ie claim 20% of the cost per year).

  1. Simplified depreciation rules

If you have started your small business already and have chosen to use the simplified depreciation rules, you might be able to deduct the expense immediately.

  • If you incur the cost between 12 May 2015 and 30 June 2017 and the cost is:
    • less than $20,000 – you may claim a deduction for the full cost in the income year you incurred the expenditure;
    • $20,000 or more – you may allocate the cost to a general small business pool.
  • If you incurred the cost between 1 January 2014 and 12 May 2015 and the cost is:
    • less than $1,000 – you can claim a deduction for the full cost in the income year you incurred the expenditure;
    • $1,000 or more – you can allocate the cost to a general small business pool.

Different rules apply if you have elected to allocate expenditure on in-house software to a software development pool. From 1 July 2015, in-house software expenditure incurred and allocated to a software development pool is deductible over five years.

  1. Non-capital expenditure

You may also be able to claim a deduction for the ongoing expenses of running and maintaining your website, such as domain name registration and server-hosting in the income year that you incur this cost.

Seek professional advice from your tax agent or adviser about how to claim website development costs 

If you would like to discuss these changes and how they effect you further please contact us below:

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