Inland Revenue has advised the new mileage rate for motor vehicles is 77 cents per kilometre. This rate applies to self employed taxpayers with up to a maximum of 5,000 kilometres of work-related travel each year. This applies to all motor vehicles (except motorcycles) irrespective of their engine sizes or whether powered by petrol or diesel and applies from the 2011-2012 income year onwards.
The rate may be used by employers reimbursing employees for the business use of an employee's motor vehicle. This entitlement extends to shareholder- employees as well. However, there are other options may be used to establish a fair and reasonable rate for claims or reimbursements (for example, AA rates).
**Note, the rules and the per kilometre rate change regularly and the rates above were accurate at the date of this blog (March 2013). For up-to-date rates, visit the IRD website.
If you would like to discuss how these measures may affect you, please contact us.
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