Each year, Inland Revenue updates rates for a range of business-related determinations to reflect changing market conditions.
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Each year, Inland Revenue updates rates for a range of business-related determinations to reflect changing market conditions. For the 2025 income year, three key indicators highlight a continued upward trend in costs for New Zealand businesses. 1. Rates Related to the Main Home Updates have been made to several standard-cost determinations, including short-stay accommodation, boarding services, childcare, and dual-use premises. These reflect a 2.5% increase in the Consumer Price Index (CPI) for the 12 months to March 2025. For example, the standard weekly cost per boarder is now $237, up from $231 in 2024. These adjustments will be relevant for individuals using standard-cost methods to determine taxable income or deductions in these areas. 2. Kilometre Rates for Vehicle Reimbursements The tier 1 reimbursement rates — which cover fixed vehicle costs like depreciation, insurance, and registration — have increased for most vehicle types:
There was no notable change to the tier 2 rate, which suggests that the cost pressures relate more to fixed costs (e.g. maintenance and compliance) than to fuel prices. 3. National Average Market Value of Specified Livestock Significant value increases have been published across nearly all categories of livestock under the herd scheme, with particularly strong growth in:
While part of the price increase may reflect improving global commodity markets, rising production costs are also likely a key contributor. For farmers using the herd scheme, these increases will result in higher closing values for 2025 and correspondingly higher taxable income. Some proactive tax planning may be worthwhile before year-end. Rising operating costs can have knock-on effects for tax and cashflow planning. If you'd like to understand what these updates mean for your business or want to explore tax-efficient responses, feel free to reach out — we’re always happy to chat. |