ATO Business Newsroom and Claiming Website Development Costs

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Claiming Website Development Costs.


Do you Run a Small Business?

Did you know that the Australian Tax Office is now running a very handy, easy to read website that is packed full of information for those that are either running a small business or are thinking of doing this at some time in the future.

Small Business Newsroom

As their trusted accountant, I am often asked by my clients many questions to do with setting up a Small Business.  At this website the ATO produces, clear and easy to read articles, short videos that help with explanations, information that is relevant and topical for small businesses, as well as links to the full ATO website for a deeper dive into all things to do with Tax.

One of the many questions that I get asked, is to do with claiming website development costs.  Here is what the ATO Small Business website has to say about it.

Claiming Website Development Costs

Did you know, that if you pay for a website to be created for your small business, you may be able to claim some of the costs as a deduction?

  • If you pay for a website for your business, here are some things to remember about claiming the costs. If you spend the money:
    • before your business starts – then you claim the cost over five years once you start up
    • after your business starts, and you pay:
      • more than $1,000 you must claim the cost over four years
      • less than $1,000 you can claim that cost as an outright deduction.
  • You can also claim an outright deduction for some ongoing expenses associated with running and maintaining your website, such as domain name registration fees and server hosting costs.
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Let’s look at three examples

  1. You’re getting ready to start a business and you spend $2,000 for a website design. The $2,000 you spent before your business started can still be claimed against your business income over five years.
  2. You’re in business and choose a business website hosting package that costs you $4,000 to set up. You also have to pay $350 a month, plus $50 a year for the domain name. The $4,000 should be claimed over four years. The monthly and yearly fees can be claimed as a deduction in the year you incur the expense.
  3. You run a small business and have decided to promote your services online. You buy an $800 static website and pay $100 a month for hosting. The $800 can be claimed as an outright deduction, and you can also claim the monthly hosting fees as a deduction against your business income.

The above information comes from the ATO website, ‘Small Business newsroom’

For day to day small business information, use the ATO ‘Small Business Newsroom’, however when you need to know the answer to something more specific or particular to your situation, then please reach out to your accountant.

Oonagh Kalsy – Accounts Manager Chan & Naylor Parramatta.

Oonagh Kalsy

Disclaimer: This article contains general information. Before you make any financial or investment decision you should seek professional advice to take into account your individual objectives, financial situation and individual needs.

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