This week IRD have release Interpretation statement IS 25/01 for the deducting costs of travel by motor vehicle between home and work. This is for people who apply the subpart DE rules for motor vehicles.

With many business owners using a motor vehicle for both their business and personal use we thought this would be a good opportunity for a quick refresher on these rules.

IRD’s position is that travel between home in work will be private in nature and costs for this travel not deductible. This is unless a vehicle is necessary on these journeys to transport equipment between home and work, the taxpayers work is itinerant, responding to emergency calls, or the home is also the taxpayer’s workplace. These factors should be considered in detail.

The commissioner also considers that incidental private use on a business journey will still count as business use. This could be stopping at a café on the way to a client’s site while on work.

Determining the exact percentage to apply for business and private use can become tricky. We are more than happy to assist anybody who may have questions about the use of their motor vehicle.