Tips to stay on top of the different rules when you have work vehicles

14 September 2023
Tips to stay on top of the different rules when you have work vehicles 

Depending on whether you’re a sole trader, partnership or company, claiming the expenses associated with work vehicles can prove a challenge. Especially if you use the vehicle for both work and personal use. 

Logbooks are useful records of business expenses relating to work vehicles and this is important when calculating what tax deductions you can claim. Depending on your business entity type, different tax rules apply when you use motor vehicles to earn income, and you might use a logbook to track expenses in different ways. 


Sole Traders/Partnerships 

If you’re a sole trader or in a business partnership, you can claim your motor vehicle expenses provided the vehicle is used to help earn income for the business. If you don’t use the vehicle exclusively for business, you can only claim a percentage of vehicle expenses. You’ll need to keep track of when you use the business for work use – you can do this by using a logbook to track actual costs or using the logbook over a test period to work out your average business usage. 

Be aware that travelling to and from home is not a business-related expense. You also can’t pop out for lunch or detour to the supermarket to pick up groceries on your way home. It’s best to keep the logbook clearly confined to travel for business purposes. 

If you don’t keep a logbook but use the vehicle for private use (for example driving from home to work), then the maximum amount you can claim is 25%. 


Companies 

The calculations for companies are a bit different as it takes into account if the vehicle is available for personal use. If the vehicle is used for personal use or is available for personal use then it incurs Fringe Benefit Tax (FBT). 

You can use logbooks (or one of the electronic logbooks mentioned above) to keep track of work-related costs and to show that the vehicles are work-related vehicles which are used for work purposes only and therefore don’t attract FBT. 

If you use the vehicle for both business and personal use, the logbook can show that FBT has been accounted for correctly. 

 

Logbook Options 

You can keep a traditional logbook on paper, download a template from the IRD or use one of the eight electronic logbooks that have been approved for use in New Zealand. These are ERoad, Gravy, Logmate, Sibatec, SmartMove, Teletrac Navman, Trackit and Picobyte Solutions. 

If you’re using a logbook to t estimate the average business use of your vehicle over a test period, the logbook must record the start and end of the 90-day test period, the vehicle's odometer readings at the start and end of the test period, distance of each business journey, the date of each business journey and the reason for each business journey. 

 

Whatever type of business structure you have, we can advise you on keeping good records and with understanding what you can claim. If you need help with your logbook, get in touch and we can help you sort this out. 


Becoming an employer of choice

15 October 2025
How to attract great people to your business and how to keep them. Three tips to help you rise to the challenge to become an employer of choice.

What the IRD Expects from You as an Employer

10 October 2025
As an employer, there are several obligations and expectations set by the Inland Revenue Department (IRD) that you must adhere to. Understanding these requirements is essential for maintaining compliance and avoiding any potential penalties. Let's take a closer look at what the IRD expects from you as an employer. Register as an Employer Before you hire your first employee, you are required to register as an employer with the IRD. This is a crucial first step in ensuring that you can meet all tax and payroll obligations. Accurate Record Keeping The IRD requires you to keep accurate and detailed records of all employment-related transactions. This includes: Employee personal details Wages and salary paid Payroll dates and methods PAYE deductions and remittances Details of benefits or allowances provided to employees Maintaining proper records helps ensure that you are reporting and remitting the correct amounts to the IRD. Deduct PAYE Tax You are responsible for deducting PAYE (Pay As You Earn) tax from your employees' pay. This involves calculating the correct amount of PAYE and ensuring it is deducted from each employee's salary or wages before their net pay is provided. Pay Employer Contributions In addition to PAYE, you may also be responsible for contributing to your employees' social security and retirement benefits, depending on the country you operate in. These contributions are typically paid in conjunction with PAYE tax. Issue Statements and Forms At the end of the tax year or upon employment termination, you should provide each employee with a statement showing their total earnings and PAYE deductions. Additionally, filing the appropriate end-of-year PAYE schedules with the IRD is required. File Employer Returns Employers are required to file regular returns with the IRD, which could be monthly, quarterly, or annually, depending on specific regulations. These returns should accurately report all payroll activities, including PAYE deductions. Handle Tax Codes and Changes It's crucial to apply the correct tax codes for each employee's circumstances. Any changes in employment status or tax code must be updated promptly to ensure accurate tax withholdings. Comply with Audit Requests The IRD may audit your business to ensure compliance with employer obligations. As such, being prepared to provide all requested information and records in a timely manner is vital. Adhering to these expectations from the IRD is not just about compliance; it's about fostering a transparent and trustworthy relationship with your employees and the tax authorities. If you need assistance with understanding or managing your obligations as an employer, consider reaching out to a professional accountant. Our team is here to help you navigate these responsibilities seamlessly, ensuring peace of mind and allowing you to focus on growing your business. Feel free to contact us for further information or assistance.

Starting a sole trader business

7 October 2025
Thinking of starting your own sole trader business? The Sole Trader Toolkit from the Ministry of Business, Innovation and Employment has all the basic advice you might need.
SHOW MORE

To discuss all your account matters please call us on 09 438 1001