Partnerships and sole traders can use Inland Revenue’s motor vehicle deduction rules to claim income tax deductions for motor vehicle expenses for vehicles used to help earn income for the business.
If the vehicle is not used exclusively for the business, you are not able to claim 100% of the vehicle expenses. For instance, travelling to and from home is not a business-related expense. In these situations, you need to work out the business use of the motor vehicle to calculate the deduction you can claim.
You can calculate the business proportion of your motor vehicle use either by tracking actual costs or using a logbook.
Once you have a business use percentage, you can calculate the deduction to claim for costs and depreciation loss for the business use of your motor vehicle for income tax and GST purposes.
Let us know if you would like a hand calculating your deductions.
DOWNLOAD THE GUIDE TO MOTOR VEHICLE DEDUCTIONS FOR PARTNERSHIPS & SOLE TRADERS
Recent Comments