IRD have published an update to kilometre rates to calculate the allowable expense for using your vehicle for business purposes for the 2020-2021 income year.
Tier 1 rates have reduced to reflect lower fuel, interest and maintenance costs.
Using the Tier 1 and Tier 2 rates
The Tier 1 rate is a combination of your vehicle’s fixed and running costs. Use it for the business portion of the first 14,000 kilometres travelled by the vehicle in a year. This includes private use travel.
The Tier 2 rate is for running costs only. Use it for the business portion of any travel over 14,000 kilometres in a year.
|Vehicle type||Tier 1 rate per km||Tier 2 rate per km|
|Petrol or diesel||79 cents||27 cents|
|Petrol hybrid||79 cents||16 cents|
|Electric||79 cents||9 cents|
For further information on claiming vehicle expenses see the IRD website.