Reselling hosting to specific client - tax expense?

[itisgeorge]

Hi all,

Just a quick question as I'm not sure if I should be claiming a few costs as business expenses.

I've basically designed and created a website for a client and am now running the site for them which incurs hosting fees (AWS) and database costs to me every month which've I've been charging them for plus a small maintenance fee to keep it all up and running.

The question is do those hosting costs count as an expense if I'm essentially reselling them on?

Appreciate the help!

Cheers,
George

 

[CriticalThinker]

If you are being charged and paying for the hosting fees then yes it is a legitimate business expense.

There will be both an income (recharge) and expense (hosting cost) here

 

[itisgeorge]

If you are being charged and paying for the hosting fees then yes it is a legitimate business expense.

There will be both an income (recharge) and expense (hosting cost) here

Great. The invoices I get from those providers also contain other personal services that I wouldn't claim expenses for, but I know which portion of the invoice is for the client. Is that acceptable or do I require some kind of proof that the portion of the invoice is what I say its for?

Hope that makes sense

Thanks!

 

[CriticalThinker]

That's fine. I would suspect that there would be some unique identifier, i.e. domain name or host, that would be detailed on the supplier invoice and can be matched back to the website you are hosting for your client so as long as you're only claiming the cost of the expenses incurred for use in the business then no need to go overboard.

In general reference to your question about claiming expenses just ask yourself the question 'are the expenses wholly and exclusively for the purposes of the trade?' If the answer is yes then it is reasonable to assume that the expense is allowable. Apply that test above i.e. you need the hosting fees to run the website for your client and provide the service, and you've got an allowable business expense.

 

[itisgeorge]

That's fine. I would suspect that there would be some unique identifier, i.e. domain name or host, that would be detailed on the supplier invoice and can be matched back to the website you are hosting for your client so as long as you're only claiming the cost of the expenses incurred for use in the business then no need to go overboard.

In general reference to your question about claiming expenses just ask yourself the question 'are the expenses wholly and exclusively for the purposes of the trade?' If the answer is yes then it is reasonable to assume that the expense is allowable. Apply that test above i.e. you need the hosting fees to run the website for your client and provide the service, and you've got an allowable business expense.

Perfect. Thanks for your time, very helpful!