What’s NEW with Motor Vehicles - March 2023

With Year End approaching there are a couple of administrative tasks you should look at

Motor Vehicles

Exempt Work Related Vehicles

If you (Shareholder) or your employees have a EXEMPT motor vehicle ( ute, van etc) it is time to send the driver a letter / correspondence stating that

https://www.ird.govt.nz/employing-staff/paying-staff/fringe-benefit-tax/types-of-fringe-benefits/employer-provided-motor-vehicles-for-private-use

“The following conditions must also be met:

· Employees must be provided with a letter of restriction stating that the work related vehicle is not available for private use except for travel between home and work, and for travel related to the business.

· Checks need to be done quarterly (every 3 months) to make sure employees are only using the vehicles for work-related purposes.

You should also keep a record of these checks.”

Shareholder Employee Motor Vehicles – LOG BOOK

If you are a shareholder / Employee of a company, then you have the opportunity to maintain a Log Book to determine what % of your travel and motor Vehicle costs are

· Business Expenses – Claimable or

· Personal Expenses – Drawings

A Motor Vehicle log must be completed every 3 years or when you have a change in use that has affected the % of motor vehicle expenses that are claimed as business cost.

You are not restricted to Utes and Vans and may choose a vehicle that has both business and personal uses.

https://www.ird.govt.nz/income-tax/income-tax-for-businesses-and-organisations/types-of-business-expenses/claiming-vehicle-expenses/use-a-logbook

Keep a logbook for at least 90 days that records:

· the start date and the vehicle's odometer reading on that day

· the date, distance and reason for each business journey

· the end date of the 90-day period, and the vehicle's odometer reading on that day

· any other information we may require.