CALL US: (07) 3367 0999 | EMAIL US:

Are your website costs tax deductible?

The ATO has provided business owners with further guidance on the deductibility of website costs in a recent Taxation Ruling.

The Tax Office considers a commercial website as a website which is used in the course of a business, irrespective of whether it is used directly to produce income. This does not include software provided on the website for installation on the user’s device.

Hardware, the right to use the domain name and content available on or incorporated into a website that has independent value to the business are considered separate from a commercial website.

The tax deductibility of a website depends on whether the expenditure on a commercial website is revenue or capital in nature under section 8-1.

Examples of expenditure which are tax deductible in the year incurred include:
– Periodic operating, registration and licensing fees
– Expenditure incurred in maintaining a website
– Modifications to a website that add minor functionality or make minor enhancements to existing functionality
– Domain name registration fees and server hosting costs
– Maintaining a social media presence and updating content mainly for marketing purposes
– ‘Off-the-shelf’ software that is licensed periodically

Costs that are ‘capital’ in nature are generally claimable over a number of years. Examples of capital expenditure include:
– Labour costs that are directly referable to the enhancement of the profit-yielding structure of the business
– ‘Off-the-shelf’ software products where the product provides an enhancement of the profit yielding structure of the business
– Acquiring or developing a commercial website for a new or existing business
– Modifications resulting in structural advantage
– Extended or new functionality

In-house software
Expenditure that is not deductible under section 8-1 may be ‘in-house software’ and deductible under the capital allowances regime. The expenditure may be deducted over 5 years from the time the in-house software is first used or installed ready for use.

If the expenditure on in-house software is incurred through developing computer software, the expenditure may alternatively be allocated to a software development pool and deducted in accordance with the pool rules.

For small business entities that choose to use the simplified depreciation rules and do not allocate the expenditure to a software development pool, the expenditure is deductible:
– immediately where the asset costs less than the instant asset write-off threshold, and
– otherwise, in accordance with the general small business pool rules.

Business
advice

taxation
planning

compliance
services

News

Understanding various kinds of super fees

February 16, 2018

No matter the kind of superfund you opt for, you will be subject to super fees. Understanding how these fees work and the difference they can make to your next egg is vital.

When it comes to superfund fees, there are two factors you need to get your head around; the kinds of fees you are being charged and the rate of fees you pay. Opting for a superfund based on these two factors can see you retire with hundreds of thousands more money.

You should be aware of the various types of fees you are being charged. If you would like to find out the fees you are being charged, you should do two things. Firstly, Google your fund’s product disclosure statement and scroll through to the fees section. You should see a list of different types of fees, with an explanation of what they are, how they are applied, and how often they will be incurred. Secondly, you should log in to your superfund account and take note of all the fees being charged to you. Investigate how closely these correspond and correlate with the product disclosure statement.

If you feel there are discrepancies, do not hesitate to contact your superfund or financial advisor and ask for clarification. It is worthwhile doing your research and comparing the fees you are being charged against other super funds and what they charge. Being complacent and not paying attention to your super is extremely irresponsible; the dividends you will receive later in life for being diligent now outweighs the burden of taking time to be informed today.

Some of the common super fees across the board include:

Another major factor contributing to how much you accumulate in your super account throughout your working life is the rate of fees you pay. Plain and simple, some funds offer much lower fees than other, creating a difference of hundreds of thousands of dollars when it comes time to retire.

Generally, funds are categorised into three groups; low super fees, medium super fees and high super fees. Ultimately, you want to be in a fund that charges low super fees. In saying this, it’s not only about super fees, as some funds have medium-high super fees but also perform better based on investment strategy, meaning you will get more back from your investments.