Running a business in New Zealand comes with many responsibilities – one of the biggest being staying compliant with Inland Revenue (IRD). As a Kiwi business owner, knowing which expenses you can claim (and which you can’t) is crucial for reducing your tax bill while staying on the right side of the rules.
Here’s a clear and practical guide to help you navigate business expense claims in NZ.
✅ What You Can Deduct
In New Zealand, expenses that are directly related to earning your income are generally deductible. Some common examples include:
Office Expenses & Supplies
Stationery, printer ink, postage, and software subscriptions
Business-related internet and phone bills
Home Office Expenses
If you run your business from home, you can claim a portion of household costs, including:
Power and internet
Rates and insurance
Rent or mortgage interest
The percentage is based on how much of your home is used for business.
Vehicle & Travel Costs
Petrol, maintenance, registration, and insurance for business vehicles
Mileage claims when using a personal car for business purposes (business-use only)
Business-related travel such as flights, accommodation, and meals while meeting clients
Professional Services
Fees paid to accountants, bookkeepers, or legal advisers
Business coaching or training courses directly related to your trade
Marketing & Advertising
Website development and hosting
Social media ads, print advertising, and promotional materials
Wages & Subcontractors
Salaries and wages
Payments to contractors or subcontractors directly tied to business operations
❌ What You Can’t Deduct
Some costs may feel like business expenses but IRD doesn’t allow them as deductions. These include:
Personal Expenses
Clothing (unless protective gear or branded uniforms)
Personal groceries, entertainment, or family holidays – even if you discussed business during the trip
Fines & Penalties
Parking tickets, speeding fines, or IRD late payment penalties
Capital Expenses
Buying assets like vehicles, equipment, or property isn’t fully deductible upfront. Instead, you claim them over time through depreciation
Private Portion of Mixed-Use Costs
For items like cars or phones used for both business and personal reasons, you can only claim the business-use portion
Tips for Staying Compliant with IRD
✔️ Keep Good Records – Store receipts, invoices, and mileage logs. IRD requires accurate documentation.
✔️ Separate Business & Personal Spending – Use a business bank account to avoid mixing costs.
✔️ Get Professional Help – Tax rules in NZ can be tricky, having an Accountant or Bookkeeper ensures you claim correctly and avoid penalties.
Final Thoughts
Correctly claiming business expenses can significantly improve your cash flow and lower your tax bill. By knowing what’s deductible and what isn’t under New Zealand tax rules, you avoid unnecessary penalties and only pay the tax you owe.
At CB Solutions, we specialise in helping Kiwi businesses stay on top of bookkeeping, expense claims, GST, and IRD compliance. Whether you’re a Sole Trader, Contractor, or Business Owner, we’ll guide you every step of the way.
Get in touch to ensure your business expenses are claimed the right way.
