Understanding which business expenses you can claim against tax is essential for any New Zealand business owner. While running your business involves many costs, not all expenses are treated the same for tax purposes.
By claiming the right deductions, you can reduce your taxable income and improve your overall cash flow. At the same time, it is important to stay compliant with Inland Revenue requirements and maintain accurate records.
Let’s explore what you can claim, what to watch out for, and how to approach this properly.
What Counts as a Claimable Business Expense?
In general, a business expense must be directly related to earning income to be claimable. This means the cost must be genuinely incurred as part of running your business, rather than for personal use.
If an expense is used for both business and personal purposes, only the business portion can be claimed.
Accurate documentation is also essential. Keeping receipts, invoices and records ensures your claims can be supported if required.
Common Business Expenses You Can Claim
There are many day-to-day costs that businesses in New Zealand can typically claim, provided they meet Inland Revenue guidelines.
Some common examples include:
- Rent or lease costs for business premises
- Utilities such as power, internet and phone
- Business-related travel and vehicle expenses
- Marketing and advertising costs
- Office supplies and software subscriptions
- Wages, salaries and contractor payments
- Insurance and interest on business loans
These expenses are generally deductible because they are directly tied to generating income.
Depreciation can also be claimed on business assets such as equipment, vehicles or tools, recognising the value they lose over time.
Expenses That Require Extra Attention
Not all expenses are straightforward. Some require partial claims or special treatment.
Mixed-Use Expenses
If something is used for both personal and business purposes, such as a phone or vehicle, you can only claim the business portion. Keeping a logbook or usage record is often necessary.
Home Office Expenses
If you run your business from home, you may be able to claim a portion of household costs such as power, rates or mortgage interest.
Entertainment Expenses
Entertainment can sometimes be only partially deductible. For example, meals or events may only be 50% claimable depending on the situation.
Expenses You Cannot Claim
There are also expenses that are not deductible. These generally fall into personal or non-business categories.
Examples include:
- Personal living expenses
- Fines and penalties
- The principal portion of loan repayments
- Most personal clothing (unless it is specialised workwear)
Claiming these incorrectly can lead to issues with Inland Revenue, so it is important to get this right.
Recent Changes and Considerations (2025 and Beyond)
Tax rules continue to evolve, and staying up to date is important. For example, recent changes include the introduction of the Investment Boost, which allows businesses to claim an upfront deduction on new assets purchased after May 2025.
This kind of update can significantly impact how and when you claim expenses, especially for larger purchases.
Working with an experienced chartered accountant ensures you are applying current rules correctly and making the most of available opportunities.
Why Good Record Keeping Matters
Strong record keeping underpins every successful tax claim. Without accurate records, even valid expenses may not be accepted.
To stay on track:
- Keep all receipts and invoices
- Record transactions regularly
- Separate business and personal expenses
- Use cloud accounting systems where possible
Our bookkeeping and payroll services ensure your records are accurate, organised and ready when needed.
How a Tax Accountant Can Help You Maximise Claims
While many expenses seem straightforward, knowing how to categorise them correctly and apply the latest rules can be challenging.
At Allan Chartered Accounting, we support businesses by:
- Identifying all eligible deductions
- Ensuring compliance with Inland Revenue requirements
- Advising on timing and structure of claims
- Helping improve overall tax efficiency
As tax accountants, we simplify the process and give you confidence that everything is handled correctly.
Getting It Right from the Start
Understanding which business expenses you can claim is a key part of managing your finances effectively. While the rules are clear in principle, applying them correctly requires attention to detail and up-to-date knowledge.
If you want to ensure you are claiming the right expenses, staying compliant, and making smarter financial decisions, working with a professional accountant makes a real difference.