Use of money interest

The interest rate for underpayments of tax has increased to 7.28% (previously 7.00%), effective from 10 May 2022. The interest rate for overpayments of tax remains at 0.00%.

Kilometre rates

Inland Revenue has also published the kilometre rates for business use of motor vehicles for the 2022 income year (year ended 31 March 2022 for standard balance dates). They are as follows:

Tier One rates can be used for the first 14,000 kilometres of travel (this threshold includes both business and private use), while Tier Two rates are used for travel beyond the first 14,000 kilometres. The Tier One rates have increased from 79 cents in the 2021 income year to reflect an overall increase in vehicle running costs. This increase is largely attributable to the rising price of  fuel.

AA rates and actual costs can also be used as an alternate when claiming a deduction or reimbursement for vehicles used for business purposes.

Square metre rate

The updated square metre rate for the 2022 income year is $47.85. This provides a simple alternative calculation of costs for the dual use of buildings (e.g. home office), instead of apportioning each individual item of expenditure. The rate does not include mortgage interest, rates and rent, which must continue to be apportioned.

Short-stay accommodation

The short-stay accommodation standard-cost rates for the 2022 income year have been amended as follows:

This rate can be used by providers of short-stay accommodation in their home to reduce compliance costs for taxpayers who meet the criteria. Note taxpayers may choose not to apply this rate and claim actual expenses if desired.

Household boarding service providers

Inland Revenue’s household boarding service providers rate for the 2022 income year is $207.00, as the weekly standard cost per boarder.

The rate covers standard expenses consisting of direct costs (e.g. food and household bills), cost of accommodation and use of motor vehicle in providing transport to the boarders. This rate provides a simple alternative calculation of deductions where taxpayers provide private boarding services in their home to no more than four boarders at any time during the income year.

Childcare household service rate

Inland Revenue has published the updated childcare household service rates for the 2022 income year. The new home-based childcare rates are as follows:

This rate applies to non-GST registered taxpayers who provide childcare services in their domestic accommodation. For providers who are part of a licensed service provider network, this rate cannot be applied.

If you require assistance in relation to any of these matters, our Baker Tilly Staples Rodway specialists are more than happy to assist you with queries or tax advice in relation to matters above.