Yes, for most small businesses, and HMRC names website costs as an example in its own list of allowable expenses. How you get the relief depends on how you are set up. A sole trader using cash basis claims a website as an allowable expense like any other business cost. On traditional accounting, HMRC treats building a website as capital spending and updating it as a running cost, so the two are claimed differently. A limited company deducts it against Corporation Tax, and the accounting treatment of the build has its own rules.
Are website costs tax deductible for a sole trader?
Yes. HMRC’s guide to expenses if you’re self-employed lists “advertising or marketing, for example website costs” among the costs you can claim as allowable expenses. Allowable expenses come off your turnover before Income Tax is worked out. HMRC’s own example: a turnover of £40,000 with £10,000 of allowable expenses means you pay Income Tax on £30,000.
So a £495 website, bought for the business and used only for the business, reduces taxable profit by £495.
Cash basis or traditional accounting: does it change how I claim a website?
Yes, and this is where most of the confusion comes from.
| How you account | Building the website | Hosting, domain, updates, maintenance |
|---|---|---|
| Cash basis | Allowable expense. HMRC says items you buy and keep for the business, other than cars, are claimed as allowable expenses in the normal way | Allowable expense |
| Traditional accounting | Capital. HMRC compares a website to a shop window: building the window is capital | Revenue, so an allowable expense: changing the display is a running cost |
| Limited company | Deducted against Corporation Tax. Whether the build is capitalised in the accounts is a separate accounting question | Deducted against Corporation Tax |
The shop window comparison is HMRC’s own, from its Business Income Manual at BIM35815: “The cost of constructing the window is capital; the cost of changing the display from time to time is revenue.” It also says that calling the spending “advertising” does not decide the question on its own. What matters is what the money actually paid for.
Is a website a capital expense or a revenue expense?
Under traditional accounting, usually both. BIM35815 says the original cost of creating a site that lasts as long as a capital asset normally would is capital, and the regular update costs are likely to be revenue. So a new build is capital, and a monthly care plan, hosting and routine changes are revenue. If you use cash basis, that split mostly stops mattering for a website, because both go through as allowable expenses.
Can I claim website costs if I use the £1,000 trading allowance?
No. HMRC is explicit: you cannot claim expenses or capital allowances if you use the £1,000 tax-free trading allowance. It is one or the other. If your website, hosting and other costs come to more than £1,000 in a year, claiming the actual expenses will usually be better than the allowance.
What if I use the website for business and personal reasons?
You can only claim the business part. HMRC’s rule for anything used both ways is to claim only the business share. For a business website that is rarely an issue, but a site that is half portfolio and half personal blog should only be claimed in proportion.
Are website costs deductible for a limited company?
Yes. A limited company deducts the costs of running the business before working out its Corporation Tax. Whether a website build should be capitalised as an intangible asset or expensed in the company’s accounts is an accounting question with detailed rules under FRS 102 and IFRS, which we cover separately in can you capitalise website costs. Hosting, maintenance and routine updates are normally expenses either way.
Which website costs can a small business claim?
The usual list, each of them a business cost when the site is used for the business:
- the design and build
- the domain name, and its renewals
- hosting
- a maintenance or care plan
- a website builder subscription
- paid plugins, themes and software licences
- copywriting and photography for the site
- SEO and online advertising
Keep the invoices. A fixed-price build with a dated invoice is the easiest kind of record to claim from.
General information based on HMRC’s published guidance as at 22 October 2026. It is not tax advice for your circumstances, and the capital and revenue split in particular is worth checking with your accountant.
More on website law and tax: do you need a cookie banner, does your website need a privacy policy, the ICO data protection fee, can you reclaim VAT on a website.
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