The amount to claim is calculated as a percentage of your home you use for business purposes. You can claim part of your household expenses (rates, house insurance, rent/mortgage interest, power) that is used for business purposes. This is because the vehicle is owned by the company which claims 100% of the expenses, then an annual Fringe Benefit Tax (FBT) adjustment is completed to factor in the vehicle being available for private use. The treatment for vehicle expenses can be different for ordinary companies. The options above apply to sole traders and partnerships (and some closely held companies). This rate (set by the IRD) takes into consideration not only the fuel costs, but the maintenance, insurance, warrant cost etc. The IRD’s current kilometre rate is $0.82/km up to 14,000 km travelled in a year. You can then claim a kilometre rate for every km travelled. You can keep a logbook recording all vehicle usage to calculate your total kilometres travelled for business use. At the end of the financial year, we then calculate the business portion of your vehicle use (as a percentage of the total actual costs, multiplied by your actual costs incurred) and make an adjustment to reflect the private use. You are required to keep a logbook for 3 months (every 3 years) to determine the percentage of your vehicle that is used for business purposes. These costs could be buying petrol, getting a warrant, maintenance costs, insurance, and any interest costs if the vehicle is financed. Keep track of the actual costs of running your vehicle and pro-rata these costs between business and private use. With this method, you need to keep accurate records of all vehicle costs. With vehicle/fuel costs, there are two options available: If there is no nexus, the expense is unlikely to be deductible (and would be considered private expenditure).Ĭommon expenses incurred by contractors include the following. To claim a deduction, there must be a nexus between the expense incurred and the income being earned. We are often asked “what expenses can be claimed as a deduction against contracting income?”
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