Changes to Calculating Motor Vehicle Expenses

Tax Tips
Written By Kim Manunui

Did you know the IRD recently announced some changes in the way motor vehicle expense for business owners are calculated?

These changes may benefit you and potentially make your calculations easier.

Here are the key changes:

  • There are new rates (as below). These apply to employees’ reimbursements from the 2018/2019 financial year. Remember, mileage reimbursements don’t have a GST component.

  • You can now use mileage rates if you are a close company with shareholder-employees, and the only fringe benefit provided is the provision of one or two motor vehicles to shareholder employees for their private use. This applies to new arrangements only and if you choose to use them, you need to continue until that vehicle is disposed of or the company stops using it for business.

  • There has also been an increase in kilometre rates for 2017/2018 and years following:

  • For the first 14,000kms Petrol, diesel, hybrid and electric – 76 cents

  • After 14,000kms

  • Petrol or diesel – 26 cents

  • Petrol hybrid – 18 cents

  • Electric - 9 cents

Remember

If you’re using a percentage basis based off a logbook, it must be completed over a three-month period and renewed every three years (unless there has been a variance in use that would require you to re visit the percentage).

If you need help calculating your expenses and making sure everything is accurate, contact us!

We take devil out of bookkeeping.

Kim Manunui

Hi, I’m Kim and I work with a great team to help individuals, as well as small and not so small businesses get their message, product and services to the world using digital media and creating wonderful websites that don’t cost the earth.

I was born in Canada, and grew up around Vancouver and the mountains of British Columbia. My love of pristine environments led me to New Zealand and eventually to the mountains, lakes and rivers of the central North Island which is home. My family’s heritage is here, and it’s from here that Korio traverses the planet.

The digital world is never static and neither are we.

And I say ‘we’ because I work with an awesome group of talented people who I gather together as required to complete a project.  Whatever your business, not-for-profit or individual needs are we gather the best team to get the job done.

Collaboratively we are creative, share sustainable values and work hard for great outcomes because that’s the buzz of satisfaction that drives us.

If you have an audience and market to reach, we can make that happen. Creative design, words that work and smart behind the scenes stuff that cuts through the online noise. We’ll design your website and then build it. We’ll manage the content as well as all your hosting needs. We can handle your online advertising so you get noticed,
and we’ll manage your social media presence so you get the clicks, likes and engagement to grow your business. All within the budget you set, because none of this needs to cost the earth.  And the job doesn’t stop when your website goes live. We are your virtual business partner.

https://www.korio.co.nz
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