Our Claimable Expenses Fact Guide outlines what exactly is a claimable expense.
PRO TIP: If you can relate the expense to the production of income, it can be claimed.
What this means in practice is that anything which helps you earn money is claimable.
However you do have to exercise some judgment about this. A lot of clients think that their gym fees are a claimable expense as they need to keep fit and healthy – er, no. That’s a personal expense. Likewise doctor fees and health insurance.
Here are some things which are claimable expenses:
- Bank Fees
- Consulting & Accounting
- Entertainment (50% of costs can be claimed as a business expense when entertaining clients, see below for more detail)
- Insurance (business only)
- Interest on business loans
- Legal expenses – for business legal advice only
- Motor Vehicle Expenses (please see note below)
- Office Costs
- Printing, Post & Stationery
- Repairs & Maintenance
- Telephone & Internet
*Motor Vehicle costs can be quite specific. If you have another vehicle available for private use, you can claim 100% of your business motor vehicle costs. If not, you need to keep a logbook for 3 months and take note of all business mileage. We can then calculate the percentage of business usage from this.
Entertainment has a lot of rules. Some expenses are 100% deductible, some are 50% and some are not deductible. Here are some examples.
- Food and drink – 100% deductible
- While travelling on business
- At promotions open to the public
- At certain conferences.
- Food and drink – 50% deductible
- Business lunch with staff or customer
- Staff Christmas party at business premises
- Friday night drinks for staff
Do You Need Help?
If you’re not sure and you are a beany.biz client, claim it and our accountants will adjust at the year end. Alternatively you can check out the detail in the IRD: Entertainment Expenses Guide.
Another rule to follow is all purchases of goods to be retained within the business above $1,000 exclusive of GST are recorded as business assets and depreciated over a period of time. Don’t panic about this – we can also calculate this for you!
Specific rules also apply if you only contract to one person – please discuss this with your accountant directly.