Is website and domain costs
tax deductible?

Yes. Website costs are allowable (GOV.UK), including hosting, domain names, website builder subscriptions, maintenance and updates. HMRC treats the original cost of creating a site like building a shop window: the build is capital, updates are revenue (HMRC BIM35815), which affects how a large build cost is relieved on traditional accounting.

Most small business websites cost a monthly subscription to a website builder, a domain name and perhaps some design help, all of which are straightforward running costs. The tax question only arises with larger builds, where HMRC compares a website to a shop window: building it is capital, changing the display is revenue.

Is website and domain costs tax deductible?

The HMRC rule

Advertising, mailshots, free samples and website costs are allowable. The rule comes from Marketing, entertainment and subscriptions, Office, property and equipment.

GOV.UK lists website costs among allowable marketing costs (marketing, entertainment and subscriptions). HMRC's manual says the original cost of creating a site is likely to be capital and regular update costs revenue, likening a website to a shop window (BIM35815). On the cash basis, capital expenditure is generally allowable, except for some items including non-qualifying intangible assets (BIM72037).

When you can claim it

• Website builder subscriptions and hosting.
• Domain name registration and renewal.
• Maintenance, updates, security certificates and plugins.
• Design and development, as an expense or through capital allowances depending on the facts.

When you cannot

• A personal blog or site unrelated to the business.
• The personal share of a site used for both business and personal purposes.
• Premium domain names bought as investments.
• Claiming the same build cost as an expense and as capital allowances.

What to claim instead

If you commission a substantial bespoke site, ask your accountant how to treat the build cost on your accounting basis. The running costs, such as hosting, domains and updates, are allowable in the usual way whatever the answer.

How to decide if you can claim it

1. Was it for the business? A cost is only allowable if you incur it wholly and exclusively for the business. If it also serves a personal purpose that cannot be separated, such as clothing that keeps you warm or a meal that keeps you going, HMRC disallows it.
2. Is part of it personal? Where a cost has a business part you can identify, such as the business calls on a phone bill or the business miles in a car, you claim that part and leave the rest out, on a reasonable basis you can explain.
3. Is it a running cost or something you keep? Whether it is a running cost or something you keep depends on what you buy. Items used up within two years, and regular renewals, are running costs; things you keep are relieved through capital allowances on traditional accounting and as expenses on the cash basis.
4. Is there a specific rule? For website and domain costs, the deciding rule is advertising and marketing: advertising, mailshots, free samples and website costs are allowable.

Worked example: a photographer’s website

A photographer pays £240 a year for a website builder plan, £15 for her domain and £600 for a designer to create her portfolio site. The £255 is a running cost. The £600 build is small and she uses the cash basis, so she claims it as an expense in the year she pays it. On traditional accounting, she could claim it through the Annual Investment Allowance instead.

Build versus running costs

HMRC treats the costs of bringing an enduring asset into existence as capital, and the original creation of a website can be such an asset. Regular updates, new content, hosting and domains are revenue. For most small businesses using a builder subscription, there is no separate build cost at all, so everything is a running cost.

Capital allowances for website builds

On traditional accounting, a website build that is capital can often qualify for capital allowances as software, and the Annual Investment Allowance can give full relief in the year of spending. The result is usually the same total relief, spread or accelerated differently from an expense.

The cash basis

On the cash basis, capital spending is generally deductible when paid, apart from some exclusions, including non-qualifying intangible assets without a fixed life of 20 years or less. Whether a bespoke build falls within that exclusion depends on what was created. For modest builds, most sole traders deduct the cost; for large or complex projects, take advice.

Online shops and apps

E-commerce platform subscriptions, payment integrations, apps and plugins are running costs. Commissioning a bespoke app or platform is more likely to be a capital project. Transaction fees charged by the platform are financial or sales costs. Monthly platform subscriptions are running costs, allowable in full when the shop is used only for the business. Themes and templates bought for the site are running costs too, as are stock photo licences used on it.

Domains and email

Domain registration and renewal, business email hosting and SSL certificates are allowable. A premium domain bought mainly for its resale value is an investment, not a running cost.

Search engine optimisation and content

Paying an agency or freelancer for search engine optimisation, blog posts, photography or copywriting for your site is a marketing running cost. Unlike the original build, content work keeps the site current, which HMRC's shop window analogy treats as changing the display.

Where it goes

Website running costs go in advertising, box 24, or office costs, box 23, of the full self-employment pages. Choose one and use it consistently. On traditional accounting, capital build costs go through capital allowances, box 49 or 50.

Where it goes on your return and in MTD

For a sole trader, the allowable part goes under advertising costs (SA103F box 24 on the full self-employment pages). Under Making Tax Digital for Income Tax, it goes in the same category of your quarterly update, which is the category TapTax files it under when you record the cost.

If your turnover was under £90,000, you can use the short self-employment pages (SA103S), which ask for a single figure for total allowable expenses rather than a box-by-box breakdown, and the full pages let you give just a total in box 31 too. The category still matters for your own records and for Making Tax Digital, where each quarterly update uses the same categories unless you choose to send one consolidated figure.

Most sole traders now use the cash basis, the default from the 2024/25 tax year, which counts a cost when you pay it. On traditional accounting you count it when you incur it, and equipment you keep goes through capital allowances rather than expenses.

How much an allowable cost saves

The value of a deduction is the tax it removes from your profit, not the cost itself. At the basic rate a sole trader saves 26p for every pound of allowable expense, at the higher rate 42p, and in the personal allowance taper between £100,000 and £125,140 as much as 62p. Landlords pay no Class 4 on rental profit, so they save 20p or 40p.

What £1,000 of allowable expense saves a sole trader in 2026/27

• Basic rate (20% + 6%)£260
• Higher rate (40% + 2%)£420
• Additional rate (45% + 2%)£470
• Allowance taper band (60% + 2%)£620

Records to keep

Keep invoices for the build and subscriptions, and a note of what the build created, which helps decide whether it is capital. Keep domain renewal receipts.

From 6 April 2026, sole traders and landlords with qualifying income over £50,000 keep these records digitally and send quarterly updates under Making Tax Digital, falling to £30,000 from April 2027 and £20,000 from April 2028. The MTD requirement checker shows when it applies to you.

Common mistakes

• Claiming a personal site or blog.
• Claiming a large build as an expense and capital allowances.
• Missing small recurring costs such as domain renewals.

Related expenses

This item sits in the advertising costs category, alongside advertising and marketing and sponsorship. The A to Z of expenses answers the same question for every other cost.

TapTax sorts each cost into the right category as you record it, applies the business share where you set one, and keeps the receipts with the figures, ready for your quarterly updates and final return.