Domain names. Expenses??

[LSV]

I have been searching like mad for information for a few weeks and I can´t get a grasp of things. Are domain names expenses?? assets?? or what??
(I assume it depends on how you operate your business.)

I had plans to move to the UK for the purpose of setting up a domain business. I have a small portfolio of names and wanted to start a business that buy names and monetize by parking(ppc) and by developing the names in the future. I will mostly be buying names but even selling some names.

I am interested in deducting the whole amount of a domain name purchase. I would think if it is possible to treat it as an expense then it would be good. In this way it would be easier to let the business grow as I intend to invest most of the income for purchasing more domain names, which would from what I understand lower the taxable income. (From what I have read from the Inland Revenue a domain is treated as an intangible asset.)

Anyways....how is a domain name for accounting purposes treated in the UK if you buy and sell some domain names and use them for earning ppc or for development? When is it an expense? When capital allowance be applied?

I feel like it´s not a clear thing for me and others. So....if anyone out there could fill me in it would be great. If anyone knows an accountant with experience within the domain biz then please share

Hope to hear inputs!

Regards,

LSV

[olebean]

LSV

It depends!

If you pay significant sums (Above £500 if i recall correctly) for them then are classed as intangible assets or goodwill and amortised. At this point they cannot be revalued at market value to suggest a asset with an increasing value! If you have regged them for a little amount then you can write them into P & L as expenses (Advertising or legal).

Disclaimer: This is not professional advice just the ramblings of an old foul. You should talk to a suitable professional

[developdomains]

my accountant treats domains as advertising costs, based on the fact you have to renew them every 2 years etc, just like a normal magazine/newspaper ad that has to be renewed when its run its course.

[admin]

But what about your profits on parking / sales?

These have to be declared as income / less expenses, right?

[olebean]

Originally Posted by admin

But what about your profits on parking / sales?

These have to be declared as income / less expenses, right?

Full accounts should always be kept! It isn't nice going through a tax investigation especially if they want to interview you..

[uglygit]

Hi LSV,

our accounts in our company class domain names as 'marketing/advertising' hope this helps you.

[LSV]

Originally Posted by MWTONLINE

my accountant treats domains as advertising costs, based on the fact you have to renew them every 2 years etc, just like a normal magazine/newspaper ad that has to be renewed when its run its course.

So your accountant treats the renewal fees as advertising costs. What if you buy a few domains over the year with prices ranging from 30-80k (or more) a name. How would your accountant treat such purchase?

[keys]

Maybe this will help,

http://www.acorndomains.co.uk/domain...ain-names.html

[olebean]

Originally Posted by LSV

So your accountant treats the renewal fees as advertising costs. What if you buy a few domains over the year with prices ranging from 30-80k (or more) a name. How would your accountant treat such purchase?

They are capitalised as intangible assets and amortised over the useful life of the domain or if i recall correctly 5 yeare, either through a linear method or declining method.. You used to be able to write of 40% in the first year if you qualified as a SME

[grandin]

cause you don't have ownership rights then any price is merely paid on a whim...no different to special phone numbers