Computer Software, Consumables And Website Costs

Computer software costs which are incurred annually, in the form of licence, e.g. anti- virus software benefit from tax relief, together with  any immaterial amounts that the company incurs in respect of computer software.

If the software costs are  significant in value, purchased outright by the company and  relate  to  improvements to the company’s computer systems, which will have enduring benefit to the business for more than twelve months , then these amounts should be capitalised and relief provided via the capital allowances regime.

General replacement items such as cabling, mouses etc, are classified as computer consumables and can be claimed as a business expense.

If your website development costs are a  function of your business, in that it generates sales revenue then this is  deemed to be an intangible fixed asset and tax relief is obtained via deduction each year in respect of amortisation (this is similar to depreciation).

However, if the purpose of the website is one of a marketing /advertising tool, then relief is given as a business deduction, similar to any other marketing/ advertising costs.


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