Hi,
A client of mine has started an internet business where the initial set up costs of the site construction is just over £10,000.
Would the £10,000 be classified as a fixed asset of the business or just a software expense?
Thanks
Matt
Replies (2)
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Depends on what the website will be used for!
Matt,
Depending on what the website will be used for depends on the capital treatment of the costs. UITF 29 outlines the types of costs involved and the treatment. Plus it saves me having to copy it down for you.
Follow the link:
Law Shipping
I think for tax purposes the website must be a capital cost.
I believe the Law shipping tax case might apply as by setting up the website through which the business will trade, you are putting the business into a state to enable trading so it must be capital.