The Inland Revenue has revised the motor vehicle mileage rate to keep up with increasing fuel prices. The mileage rate has recently been amended to 74 cents per kilometre for the 2010/11 income year i.e. from 1 April 2010 for taxpayers with a 31 March balance date.
The previous rate of 70 cents per kilometre applied for the 2008/09 and 2009/10 income year. This mileage rate applies to both petrol and diesel fuel vehicles, but not for motorcycles.
These mileage rates are used to calculate non-assessable motor vehicle allowances paid by an employer to an employee.
As the IRD’s mileage rate may not reflect their true costs, actual costs or the logbook method can be used instead. Employers may also use the motor vehicle running cost data published by other reputable sources, such as the New Zealand Automobile Association Incorporated, as an alternative reasonable estimate for reimbursement to employees.
If you have any questions please contact your Hayes Knight adviser or our Tax Team:
T + 64 9 414 5444
Senior Tax Manager
T +64 9 414 5444