Tax treatment for high value domain purchases

**highlander** · 13-12-10

I have had a look through the forum but can't find to answer to this question, so hoping someone can help

If I run my business through a Limited Company and the company buys a domain name for £3,000.

Can I write this cost of as an expense of the company or does the company have to add it to its balance sheet either as a fixed asset (intangible asset) or as trading stock?

If it needs to be added as a fixed asset would the company be able to claim capital allowances on the cost?

Thanks for your help

**gadget** · 13-12-10

You can claim the expense.
Record it as an asset.
Not sure about claiming capital allowances.

**stargazer** · 15-12-10

It all depends on the future use of the domain. If it will be used to generate future income then add it as an asset (It will form part of company IP) and claim AIA so you get the tax relief on the full amount in the year of purchase.

**highlander** · 15-12-10

Originally Posted by stargazer

It all depends on the future use of the domain. If it will be used to generate future income then add it as an asset (It will form part of company IP) and claim AIA so you get the tax relief on the full amount in the year of purchase.

My understanding is that AIA is an allowance for plant & machinery, so I am not sure how I could claim that allowance against a domain purchase. Happy to be corrected if I am wrong