IRD's mileage rate decreases to reflect reduced vehicle running costs
The IRD's mileage rate has been reduced to 74c (down from 77c), effective for the 2015 income year onwards
In line with the Commissioner's obligation to review
the mileage rate on an annual basis, the Commissioner has announced
the result of the review for the 2015 income year for persons whose
business travel is 5,000 or less in an income year.
The review resulted in the mileage rate being reduced
to 74 cents (from 77 cents for 2014) per kilometre for both petrol
and diesel fuel vehicles.
The reduction in the rate is largely due to lower
average fuel costs during the 2015 income year compared to the 2014
income year and to some extent more efficient motor vehicles.
The Commissioner does not intend to amend tax returns
for taxpayers who have already filed their 2015 returns using the
2014 mileage rate.
Taxpayers can choose to use the Commissioner's
mileage rate or use actual costs if they consider that the
Commissioner's mileage rate does not reflect their true costs.
Sufficient records need to be kept to support actual costs
claimed.
Employers can choose to use the 2015 vehicle mileage
rate as a reasonable estimate of costs when they reimburse
employees for the use of their private vehicle for business related
travel post 1 April 2015. Employers can also choose to use an
alternative estimate from a reputable source such as the NZ
Automobile Association.
The mileage rate does not apply to motor cycles,
hybrid and/or electric motor vehicles on the basis that these modes
of transport are not commonly used for business purposes.
If a self-employed person uses these forms of
transport for business purposes they will need to calculate their
actual expenditure or in the situation of an employer
reimbursement, the employer may make a reasonable estimate of the
employee's costs.
If you have any questions, please contact the Hayes Knight
Knowledge Shop Consultants on solutions@knowledgeshop.co.nz or
the Tax Team direct.
Phil Barlow
Director
T +64 9 414 5444
E phil.barlow@hayesknight.co.nz
Shelley-ann Brinkley
Associate
T +64 9 414 5444
E shelley-ann.brinkley@hayesknight.co.nz