Many new businesses promote themselves through their website, however if you have been in business for a while you may already be on to your third or fourth website. For most businesses the website is an important tool for potential clients to find out more about you, to sell your product or communicate with your target markets. As it is an important marketing tool for your business, keeping your website up to date and beneficial is as important as what your Yellow Pages listing used to be!
Most business owners assume that their new website (regardless if it is a brand new website or a website rebuild) is entirely tax deductible. Unfortunately it is not as simple as that, but the ATO rules in relation to this are built to benefit your business, so there is no need for concern.
Your company website (or websites) may be deducted in two ways:
- Simple websites can be deducted in that business year – entirely
- Complicated websites should be claimed as a software expense and claimed over four years.
To find out if your website expenses are simple or complex/software you need to decide if any of the below checklist questions can be answered with a ‘yes’:
- Can users login to your website to use additional feature or interact with your content?
- Was your website designed around and to meet your criteria?
- Was your website made by a developer (who used an extensive development process) or by a designer, who was more focused on design aspects?
- Was your website created and debugged using complicated and specifically created code and script?
If you answered yes to any of the above questions you need to insure that your invoice for your new website is broken down between activation, hosting, registration, design and development. Then the software component of your website can be deducted over 4 years.
To discuss this further, please contact one of our accountants at Rubiix.
Submitted by: Hayley Go
Email Hayley