New Rules for Vehicle Mileage Claims
Inland Revenue have announced the new method for claiming mileage. The new method uses a 2-tier system and requires knowing how many total kilometres the vehicle has travelled in a year. So it’s super important now for you to record the odometer reading as at 31 March each year or if you buy or sell a vehicle used for business.
The new rate of 76 cents per km is applied to the total kilometres travelled and then multiplied by the business usage percentage. After 14,000kms the rate is 26 cents per kilometre and adjusted for the business percentage.
If the business usage of your vehicle is less than 3,500 kms per year, you can continue to record the business kilometres in your log book as usual.
The new rules also allow companies to adopt the new kilometre rate for motor vehicles used for business which are also available to shareholders for private use.
We will determine the best method of claiming motor vehicle costs for your situation as this applies while the vehicle continues to be used for the business.