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 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.
Budget 2023 builds on the $889m already provided in response to this year’s storms. A further $6b is allocated for a National Resilience Plan , for rebuilding after weather events. $71b is committed to new and existing infrastructure projects: not only storm damaged communications, power and roading, but schools, hospitals, public housing, rail and road.
