Often when we are completing small business accounts we find people confused about what can be claimed for their business vehicle costs. In many cases the vehicle is used for both personal and business travel.
There are several ways these costs can be allocated i.e.:
1. Private motor vehicle (also used for business)
a) If travelling less than 5,000 km per year for business, keep a Log Book of all business travel, and at the end of the year the total business km traveled can be claimed as a business cost at the IRD set rate (currently 72 cents per km)
b) If travelling more than 5,000 km per year for business, keep a log Book for 3 months showing all travel (business and personal), then calculate the business% of total km traveled over the 3 month period. This % can then be claimed from all the vehicle costs (fuel, servicing, RUC, registration, insurance, repairs and maintenance).
2. Company Owned Vehicle (listed on Company Asset Register)
Claim 100% of costs and at Year End pay Fringe Benefit Tax (FBT) for personal use (based on 20% of the cost price of the vehicle).
If you are unsure of your specific requirements contact us, we specialise in Small Business Accounting.