Website costs correctly recorded

Accounting
1

Hello.

I understand that a website where I sell goods is treated as a shop window by HMRC and therefore the cost of constructing it is treated as an asset and the cost of ongoing maintenance / updating is treated as a business cost.

However… I use wix and created (and will maintain) the website myself for a yearly subscription fee for their service. Any ideas how this should be split? I spent £150 on a three year sub (£50 a year). I’m looking for any guidance on how this amount should be split between web site build (asset cost) and web site maintenance (expense cost). Any rules of thumb?

Additionally, could I just put the whole £150 subscription cost under software licensing and treat it as a business cost? Even though it’s related to a potential asset (the website)?

Cheers.

2

Hi Bluesden,
I would say it is a kind of subscription, so I would post it to subscription.

1 Like
3

I wrote a little guide on website and accounting treatments (end of page), hope that would help.

4

Thank you both @rhc & @FaradayKeynes I think subscription cost is the best route.

@FaradayKeynes - Your article raised another question for me that I hadn’t considered. Should the cost of buying the website URL be treated as an asset rather than a business cost? I’m guessing it should and should therefore be depreciated. However, the URL provides value every year and doesn’t reduce in value.

5

Anything below £1000 you can post as P&L item and not necessary to take it to BS.

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6

You don’t depreciate a website URL asset.

Further unless that URL and its website generates revenue I wouldn’t even consider it an asset. Expense it to the p and l

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7

Thanks all. Much clearer for me now.

8

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