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Tax and accounting treatment of Iphone/Ipad/Android apps

17th January 2012

This is a burgeoning industry and many developers are confused about the tax aspects. Broadly, the tax treatment follows that of websites and treatment of software development costs.

The difference is that, here, there is a clear economic benefit and intention of direct sales. Thus aside from the planning stage we should be looking to capitalise on the balance sheet the majority of the costs. If the (startup) costs are under £100,000 you suffer no tax disadvantage due to the annual investment allowance available. The “best of both worlds” in other words (you can show a strong set of accounts but little tax on the development costs!)

Please note that this is a “rough guide” and not definitive. Please contact us if you wish to go through your exact circumstances and need something specific like our bookkeeping services.