Given that last week’s blog was on the budget changes, this week we thought we would cover a topic that is somewhat less exciting but relevant, being mileage rates.
The IRD have put out their latest mileage rates applying to the financial/income year that has passed, being the 2017 income year.
The mileage rate is up 1 point from the previous year from 72c to 73c per Km for both petrol and diesel vehicles.
Interestingly, a new rate has been introduced in relation to hybrid and electric vehicles of 81c at a much higher rate than for the other two more commonly used alternatives. This is possibly to account for the fact that although the running costs for a hybrid is cheaper overall, the cost of using a hybrid is higher?
It is to be noted that there are other accepted reimbursement methods such as using the AA rates and using actual costs instead of those published by the IRD.
From 1 April, the methodology is set to change. Taxpayers can use standard values, rather than calculating actual costs. The previous mileage rate method has been modified with no kilometre limit. The IRD is to publish new rates divided into two tiers. We will discuss this in further detail once we have further information on this method and the rates.