2005 media releases
Reimbursement for the use of a private motor vehicle
22 September 2005
Employers may use published mileage rates to reimburse employees who use their own vehicles for work purposes.
Under the Income Tax Act 2004, employers may determine the amount of employee reimbursement exempt for tax purposes when employees use their own vehicles for work purposes.
Employers can reimburse an employee based on actual expenditure incurred by the employee - or by making a reasonable estimate of the expenditure incurred. A 'reasonable estimate' recognises that employers have differing business needs and that a 'one size fits all' rate may not necessarily be accurate.
Employers may use rates published by a reputable independent New Zealand source, representing a reasonable estimate (e.g. New Zealand Automobile Association Inc mileage rates) to reimburse staff using their private motor vehicle for work purposes.
The mileage rate used must be a reasonable estimate. In establishing a reasonable estimate regard should be given to the nature of the business and the type of employee vehicles.
Employers may also continue to use the rates published by Inland Revenue in the February 1996 Tax Information Bulletin (Vol 7, No 8).
This gives employers four options when reimbursing staff for business use of a private vehicle:
- actual expenditure incurred by the employee
- an employer's own reasonable estimate of expenditure incurred by an employee
- published mileage rates, as long as they represent a reasonable estimate
- the rates published by Inland Revenue in the February 1996 Tax Information Bulletin.
Employers may apply published mileage or other rates effective immediately. The other options have been available to employers for a number of years.
Mileage rates for vehicle expenditure incurred by self-employed are being reviewed by Inland Revenue.
Other media releases this year
- Tip-off leads to jail sentence for dishonest tax agent
- Family assistance payments to be available early
- Inland Revenue releases new tax rules for people who host boarders
- GST fraud gets jail sentence for Auckland property developer
- Inland Revenue seeks owners of forgotten money
- Family Assistance Payments to be made early
- High Wealth programme brings in millions of extra tax dollars
- Identity theft, fraud lead to jail for Palmerston North man
- Hamilton man sentenced on tax fraud
- Auckland consultant gets 12 months in jail for GST fraud
- Inland Revenue signs Hewlett Packard to supply Notebook Computers
- Tauranga man jailed for horticultural tax evasion
- New Zealand and Australian tax help for business
- Salary and wage earners: are you entitled to a tax refund?
- Some seasonal workers entitled to tax refunds
- Auckland barrister jailed for tax evasion
- Inland Revenue reminding Marlborough agriculturalists
- Inland Revenue Appoints Chief Information Officer (IT)
- Incident at Upper Hutt Processing Centre
- Forged GST claim leads to eight-month prison sentence
- Inland Revenue offers help to flood affected BOP businesses
- Auckland Man jailed for tax fraud
- Inland Revenue releases view on HHG capital reduction proposals
- Prison sentence for tax evasion
- Early Family Assistance Payments
- Nine years of tax evasion brings 18 month sentence for New Plymouth bricklayer
- Tax season now underway
- Are you eligible for a childcare rebate?
- Early Family Assistance Payments
- Inland Revenue signs agreement with TelstraClear
- Inland Revenue cautions against income splitting by professionals
- Inland Revenue welcomes sentence for Hamilton PAYE offence
- Cambridge students scoop national award for tax knowledge
- US, NZ agree on tax treatment of fiscally transparent entities
- 7 February payment deadline
- Theft of Westpac courier bag - advice to taxpayers and other Inland Revenue customers
- Inland Revenue not letting up on BoP tax evasion
- Inland Revenue outlines rebate claim process for tsunami donations
- Inland Revenue welcomes sentence in $40,000 evasion case
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Date published: 22 Sep 2005