ATO: Claiming website development costs

If you are a small business who incur expenses creating or maintaining their business website you may be able to claim some costs as a deduction in your tax return.

Capital expenditure
You may be able to claim costs incurred before your business starts. This can be claimed over five years (20% of the cost per year) once you begin.

Simplified depreciation rules
If you have started your small business and have chosen to use the simplified depreciation rules, you may immediately deduct the expense.

• If you incurred the expense between 12 May 2015 and 30 June 2017 and the cost is:
  • less than $20,000 – you can claim a deduction for the full cost in the income year you incurred the expenditure
  • $20,000 or more – you can allocate the cost to a general small business pool
• If you incurred the expense between 1 January 2014 and 12 May 2015 and the cost is:
  • less than $1,000 – you can claim a deduction for the full cost in the income year you incurred the expenditure
  • $1,000 or more – you allocate the cost to a general small business pool.

Different rules apply if you have elected to allocate expenditure on in-house software to a software development pool. From 1 July 2015, in-house software expenditure incurred and allocated to a software development pool is deductible over five years.

Non-capital expenditure
You can also claim a deduction for the ongoing expenses of running and maintaining their website, such as domain name registration and server-hosting. You can claim these in the income year you ​incurred the expense.