My understanding is that website development costs must be capitalised. They cannot be written off as revenue expenditure. Is my understanding correct?
I would appreciate advice on this.
Thanks
Aadil
Related resources
Replies (3)
Please login or register to join the discussion.
Yes, that's what I thought until last week but
I have a client who has spent £50,000 on website development and says it will all have to be redone every six months. So does that make it revenue, do you think?
Website costs
If there as a long term benefit of the website and the site will directly generate sales (ie shopping cart) then the development costs should be capitalised and the maintenence, amendment and hosting fees should be expensed.
Otherwise expense all costs inc development.
I would look at each one on it's merits, refer BIM35870 for further guidance, and claim a 100% deduction of any capitalised costs under the Annual Investment Allowance rules.
Regards, Jason