Do you know what business expenses you can claim?
Claiming back expenses can be a tricky business and there a few sneaky tips that are always good to know.
For example – if you shout coffee for meeting purposes and decide to drink it at the café, you can only claim back 50 percent of the cost back – whereas if you order takeaway and have it at the office, you can claim 100 percent back. Takeaway coffees from here on out!
What counts as an expense?
Thanks to business.govt.nz for compiling a neat little list of claimable expenses. As they say, “The more you can claim the less tax you’ll pay”, so grab your pen and paper and take note so as not to miss out on any dollars saved.
- Vehicle expenses, transport costs and travel for business purposes
- Rent paid on business premises – including your home
- Depreciation on items like computers and office furniture
- Interest on borrowing money for the business
- Some insurance premiums
- Work-related journals and magazines
- Membership fees of professional associations
- Home office expenses
- Work uniforms
- Work-related mobile phones and phone bills
- Tax agent’s fees.
- They’ve also noted that Inland Revenue supplies a downloadable vehicle logbook template to keep track of your work vehicle costs.
It’s said that: if you use it for work – it’s claimable. What sounds too good to be true, usually is – as there are exceptions.
These exceptions are often found under entertainment expenses. The IRD provides a complete detailed list of these, but here is an abbreviated version for your leisure.
50 percent deductible entertainment expenses:
- Corporate boxes
- Including tents and marquees for business related social functions
- Holiday accommodation
- “If you have business expenses for a holiday home, timeshare apartment or similar venue, you can deduct only 50 percent of the cost of accommodation as well as 50% for food and drink expenses relating to using the accommodation”.
- Recreational boats – not for personal use but for a day with the management team for example.
- Food and drink – onsite if not classed as a light meal or light refreshment, offsite and given by the business as a gift.
100 percent deductible entertainment expenses:
- Food and drink – while travelling on business, provided for a conference, and “light” meals and refreshments onsite
- Promotional entertainment – such as giving away freebies for promotional purposes or if something is provided for review in a publication etc
- Charity-related costs
- Offshore entertainment – but not including the waters surrounding New Zealand, best explained as offshore but on another shore.
The best way to ensure you’re claiming back everything possible is to use a good accountant. Hold on to every receipt and keep yourself well-informed of all those sneaky exceptions.
Information courtesy of business.govt.nz.
By Natalia Rietveld