How do NZ sole traders claim vehicle expenses?

New Zealand sole traders can claim vehicle expenses using one of two methods: **Method 1 — Kilometre Rate (simplest):** For 2024/25, the IR kilometre rate is NZ$1.04 per kilometre for the first 14,000 business kilometres, and NZ$0.38 per km above 14,000km. This rate covers all vehicle running costs — petrol, oil, tyres, registration, WOF, and depreciation. Keep a mileage log recording each business journey: date, destination, purpose, and kilometres. **Method 2 — Logbook Method:** Keep a detailed logbook for at least 3 continuous months to establish your business use percentage. Then apply that percentage to actual vehicle costs including petrol, insurance, registration, maintenance, and loan interest. This method generally yields higher deductions for high-use vehicles. The logbook must show date, start and finish locations, purpose, and kilometres for each journey. It must cover a representative period of at least 3 months. **What counts as business travel?** Travel between your regular home and a fixed place of business is NOT deductible (it's a private cost). Travel directly between business locations, to client meetings, or from home to a non-regular temporary work site may be deductible.

• Km rate method: NZ$1.04/km for first 14,000km (2024/25)
• Km rate: NZ$0.38/km above 14,000km
• Logbook method: actual costs × business use %
• Logbook must cover minimum 3 months
• Home-to-fixed-workplace travel is NOT deductible