Tax implications of websites

Author -  Vaughan Reed

Although we are not often asked during the ‘consultation’ stage, it is worth knowing in advance the tax situation for some of the main costs involved in a website project. Hopefully this short information sheet will shed some light on the topic for your next website project.

In very broad terms, costs that give long term benefits but are incurred as a one off are generally considered to be capital items (CapEx). They can therefore be treated as assets and depreciated according to set depreciation rates.

On the other hand some items are considered as operational expenses (OpEx) and are not subject to capitalisation. Depreciation can not be applied therefore to such items.

Website costs can be summarised as follows:

CapEx - Depreciable as a capital expense

  • Website design, build & implementation
  • Reconstruction or upgrade to existing site

OpEx - Deductable as an operational expense

  • Site update
  • Web hosting - Deductable as an expense

To cover both scenerios we offer two flexible investment options for our website services :

Web to Cloud Subscription Our all-inclusive 'cloud' subscription includes the Professional Services below and is available as 'Hosted' or 'On-Premise'. There's no significant capital outlay which frees-up your cash-flow. Web to Cloud spreads risk and investment, yet still delivers dynamic, world-class websites to exceed business objectives. Learn more

Upfront InvestmentOur traditional premium service has a one-off project cost and is available as both 'Hosted' and 'On-Premise'. Our Professional Services are available when you need them and can be selected À la carte. They can also be customised to suit your needs or utilised within a monthly support agreement. Learn More

 

NB: We recommend talking to your Accountant or Financial Advisor as this type of information is liable to change.

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