New kilometre rate for claiming motor vehicle expenses
accelerateonline • February 4, 2020
Are you using your car for business purposes? It’s timely to outline the process for claiming tax on your work vehicle expenses.
- If you’re using a vehicle for business purposes, you can claim tax back on expenses.
- If you use the vehicle only for business, you can claim the full running costs. If you use the vehicle for any personal travel, you’ll need to separate the running costs of your vehicle between business and private use.
- There are two ways to calculate the business usage:
- Actual costs mean keeping accurate records, including details of private and work-related expenses. You also need to show the reasons for business travel and the distances involved.
- Use a logbook to record all business trips and then calculate an actual business use percentage for each period. Or keep a logbook for at least 90 consecutive days to work out the business use of your vehicle, which you can then use for the next three years (as long as the nature of the business varies by less than 20% over that time).
- Once you have the business proportion, you can use the Inland Revenue’s kilometre rates to work out how much you can claim:
- Tier One is calculated as a combination of the vehicles’ fixed and running costs. It applies for the business portion of the first 14,000 km travelled by vehicle in a year.
- Tier Two accounts for running costs only and applies for the business portion of any travel in excess of 14,000 kms.
- To make claiming your business usage easier, make sure you record odometer readings at the end of every year to help determine your business mileage vs personal mileage.
If you are a company and provide vehicles to staff (including yourself!), you will need to make sure you’ve got your fringe benefit tax position right. Talk to us as there are exemptions that may apply for specific types of vehicles or where restrictions are placed on the use of company owned vehicles.
Accelerate December 2025 As 2025 draws to a close, we’d like to thank you for your continued support this year. Our team is taking a well-earned break from Friday 19th December and will return to the office on Monday 12th January 2026. But before you switch on the out-of-office, take a moment to get your business ready for the holiday season. In this issue, we’ve included tips to help you manage the summer cash flow crunch, a guide on what you can (and can’t) claim back for festive spending, advice for compliant Christmas promotions, and a timely reminder to look after your team’s mental health as the year wraps up. Wishing you a safe, sunny, and successful holiday season! How to survive the Christmas cash flow crunch While retailers race through their busiest time of year, not every business benefits from the Christmas rush. Many service-based, wholesale, or manufacturing businesses might even face a sharp decline in orders just when holiday pay, bonuses, and annual shutdowns see expenses rise. 1. Forecast to February Projecting your income and expenses well into the new year helps you spot potential shortfalls and take action before they become problems. 2. Invoice early, follow up now Send invoices before your shutdown period and chase outstanding debts while clients are still around. 3. Prioritise essential spending Identify what expenses are necessary and what can wait until revenue picks back up. 4. Prepare for January’s tax obligations The 15 January due dates for PAYE, GST, and provisional tax can feel like a Grinchy surprise. Set aside funds now to avoid starting the new year under pressure. Worried about the summer squeeze If this season feels tight, get in touch. Our financial advisors can help you plan ahead, manage your cash flow, and explore IRD instalment options to lighten the load. Tis the season for giving... but what can you claim back Gifts, bonuses, parties, and more: here’s a brief breakdown of what you can and can’t claim this festive season. Employee gifts Gifts that are not subject to the entertainment tax rules (vouchers, hampers, flowers) are fully deductible and exempt from Fringe Benefit Tax (FBT) if they cost less than $300 per employee per quarter, and the total for all staff stays below $22,500 a year. However, gifts that do fall under the entertainment tax rules, like food hampers or wine, or taking your team to a show or event, are 50% deductible, and not liable for FBT. Cash bonuses Bonuses are classed as income, so PAYE and other payroll taxes apply. These “lump sum” payments are taxed at a flat rate based on your employee’s income bracket. Client gifts Food, drink, or entertainment gifts are 50% deductible. Other gifts (flowers, movie tickets, a book) are 100% deductible Workplace events Christmas parties, client dinners, or team drinks are 50% deductible, while morning teas, office lunches, and charitable donations are fully deductible.
Accelerate - December 2023
Accelerate August 2023
Inland Revenue have recently announced this year’s livestock Herd Scheme Values and we think this is a great opportunity to update you on the latest movements. The Herd Scheme Values are the National Average Market Values, determined by a process involving a review of the livestock market as at 30 April.
The values for Dairy this year have seen a fall in values across all female classes, but increases across all male classes. The fall in R1 heifer values can be attributed to the prohibition of live export by sea commencing from 30 April 2023. For the first time the National Average Market Value for R1 Heifers is less than the National Standard Cost of breeding and rearing an R1 Heifer.
In contrast to Dairy values Beef values have increased on average 9% and are almost at record values for all classes.
Sheep values have all fallen from the high of 2022, slipping back an average of 10.2%. Whilst values have fallen, they are still either the second or third highest that they have ever been depending on which class of sheep you are looking at.
Goat values have increased on average 7.8% with almost all classes of fibre and meat producing goats at record highs. The value of milking goats continues to be well down from historic highs, except for breeding bucks which are at their highest value.
Like the rest of the world, New Zealand has reeled from the aftermath of Covid, rising inflation and interest rates, and the cost-of-living crisis. This year we also have a massive storm damage repair bill.
Any tax cuts, or changes to the tax thresholds were vetoed in Budget 2023 as this was viewed as worsening inflation.
