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Changes to the 2023-2024 IRD kilometre rates

The IRD has announced the kilometre rates, also referred to as mileage rates, for the 2023-2024 income year.  The rates are $1.04 for petrol, diesel, hybrid and electric vehicles for up to 14,000 km.  After 14,000 km, the rates are $0.35 for diesel and petrol vehicles, $0.21 for hybrid vehicles, and $0.12 for electric vehicles. The rates set out below apply for the 2023-2024 income year for business motor vehicle expenditure claims. 

Vehicle typeTier 1 rates (up to 14,000 km)Tier 12rates (over 14,000 km)
Petrol or diesel$1.04$0.35
Petrol hybrid$1.04$0.21
Electric$1.04$0.12

The rates have increased for all vehicle types in both Tier 1 and Tier 2 in light of changing fuel and car maintenance costs.

The IRD has a history of revising the kilometre rates and changing them every year.  Since 2017, the Tier 1 rates have increased by at least two cents per kilometre every year.  However, Tier 2 rates actually decreased in the 2019-2020 and 2020-2021 income years and again went up for the 2021-2022 and 2022-2023 income years due to the high fuel prices.

This year, the IRD has increased the rate for the first 14,000 km by 9 cents, the biggest increase so far.  All rates for kilometres over 14,000 have increased by a cent.

Records you need to keep

You must keep a logbook of your business and personal driving to get Tier 1 reimbursement or deductions for the first 14,000 km (total).   If you don’t keep records of your driving, you can only claim Tier 1 rates for the first 3,500 km of business-related driving.

Source: https://www.ird.govt.nz/income-tax/income-tax-for-businesses-and-organisations/types-of-business-expenses/claiming-vehicle-expenses/kilometre-rates-2023-2024

Disclaimer
Unfortunately, with details changing all the time and at such speed, we need to add that the above content is correct at the time of writing as far as the author is aware and is very much subject to change. We have, to the best of our ability, acknowledged any shared content. All related links provided to the corresponding websites are subject to change as they are live links.