Important UK Tax Information

This pages outlines important tax information for UK businesses that are considering setting up a website.

HMRC advise that the initial cost of “bringing into existence an asset or advantage of enduring benefit to the trade" is treated as capital expenditure, and is not fully deductible.

The website set-up cost should be included in your accounts as an asset and capital allowances claimed on the cost of creating the website.

From April 2008, this expenditure qualifies for the Annual Investment Allowance (AIA) of 100% of the first £50,000 of expenditure in the year.

HMRC compare the cost of a website to that of a shop window. The cost of providing the shop window is treated as capital expenditure, but the cost of changing the display is revenue.

If your website is used purely for advertising your business then the website set-up cost could be set against your profits in full. However if you are selling goods through your website then the cost should be capitalised. If there is any annual maintenance cost, then this can be off-set against profits in the year that is incurred.

This information is only given as a guide. You should speak to a qualified tax advisor about your own business circumstances.

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