What are the rules for claiming travel expenses as a self-employed individual in New Zealand, and what documentation is required?

Self-employed individuals can claim deductions for travel expenses incurred wholly, exclusively, and necessarily in the pursuit of deriving business income. Travel expenses are generally categorized as either domestic travel (within New Zealand) or overseas travel.

### Domestic Travel Expenses

Domestic travel expenses are deductible, but the IRD strictly scrutinizes claims to ensure they are not private commuting costs.

• Travel Between Jobs/Clients: Travel between different work locations, client sites, or suppliers is deductible. Travel from your home to your regular place of business (e.g., your office) is usually considered private commuting and is not deductible.
• Mileage Claims: If you use a personal vehicle for business travel, you can claim a deduction using either the Actual Costs Method (tracking all vehicle expenses like fuel, insurance, maintenance, and depreciation based on business use percentage) or the Prescribed Rate Method (claiming a set rate per kilometre, which covers all costs, though this method has limitations).
• Accommodation and Meals: If you must stay overnight away from your usual home base for business purposes, accommodation and meals consumed while away are deductible. Day trips where meals are taken are generally not deductible unless the travel is exceptionally long and arduous.

### Overseas Travel Expenses

Overseas travel is deductible only if the dominant purpose of the trip is business. If the trip has a dual purpose (business and private), you can only claim the portion of the costs directly attributable to the business activity (e.g., conference fees, specific business meetings).

• Apportionment: If accommodation and airfares are shared between business and private time, the costs must be apportioned based on the number of business days versus total days.

### Essential Record Keeping

To support any travel claim, the IRD requires detailed records. For mileage claims, this must include:

• The date of travel.
• The purpose of the trip.
• The starting location and destination.
• The distance travelled (kilometres/miles).

For flights and accommodation, you must retain original invoices or receipts.