BIM35855 - Capital/revenue divide - computer software: In-house software development costs: Abortive expenditure

Whether the expenditure is capital or revenue does not depend on the success of the project

Whether expenditure on computer software is deductible under Case I or II depends on the same criteria as expenditure which had a successful outcome - see BIM35325.

Abortive capital expenditure on computer software qualifies for machinery and plant allowances (CAA01/S71 - see CA23410 and CAA01/S67 - see CA23350).

Thus for all practical purposes there is no scope for arguing that abortive expenditure on software is neither revenue nor qualifies for capital allowances.