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MEMBER 8 writes: 

"I have just received in my inbox an email from the ATO's Small Business Newsroom titled 'Claiming website development costs'. While an interesting read, I would be quite concerned if any client came to me stating that this is the be-all and end-all on how such costs should be treated for tax purposes. The bane of every tax adviser's life is the client who has 'read something somewhere' about how the tax law operates in his or her circumstances and therefore knows how tax works better than his or her adviser. And now we have the ATO advising our clients in 'layman's terms' to make our lives so much easier...

Where is the technical support for the ATO's views on this topic? One long-ago withdrawn tax ruling, which indicates quite a different view, is all I could find. The Find Out More links in no way provide support for the ATO's position on deductibility over 4 years. Is this position given on an assumption that anything costing over $1,000 is in-house software? If so, what about after 1July 2015, when the law is proposed to change so that such software will be deemed to have a 5 year effective life? If the item is to be treated as a depreciable asset, why not say so?

Who does this ATO view apply to? What is the ATO's definition of 'small business' for application of this treatment? I could not find any links or tabs on the item to indicate who can 'benefit' from the ATO's stated approach on this issue.

I would go as far as to say that any tax adviser worth their salt should be aware of, but wary of, such vague pronouncements from the ATO. Applying the actual tax law should give your client the correct (and potentially better) outcome. Although whether your client will be prepared to pay you for your advice is another question. After all, the client is now fully informed on this issue by the ATO so won't need your help anyway..."