Home » Blog » Business tax deductions you might not know about

Business tax deductions you might not know about

There are few among us who don't enjoy seeking out every possible legal tax claim. Two expert tax accountants share their insights into commonly overlooked small business tax deductions.

Claim your home office space

Roger Shackelford, Tax Partner with Baker Tilly Staples Rodway, based in Wellington, says there are the obvious tax deductions, like advertising and bank charges, but people often forget that, if they work from home, they may be able to claim a portion of their mortgage interest, rates and insurance.

Georgie Webber, a Chartered Accountant with Peat Johnson Murray in Auckland, agrees. To work out how much of your home office space you may be able to claim for, Webber says it’s important to establish how many square metres your home covers, and what percentage of the space constitutes your workspace.

“You may also be able to claim part of your utilities bills using this method,” she says. “And if you’re a tradie, and you use your garage to store tools and equipment you could claim that too.”

Deducting entertainment expenses

Meetings (including dinners outside of work hours) at which the main topic of conversation is business, may also be partially deductible, along with thank you gifts that you send to a client, Shackelford says. But it is worth checking with your tax advisor when in doubt on these sorts of expenses.

Subscriptions and memberships

Shackelford adds that expenses like subscriptions and memberships may also be business tax deductions. “For example, if you’re a member of the local golf club and you take your clients out with you every now and again, a proportion of the golf membership could be a legitimate business tax deduction,” he says.

Motor vehicle expenses

“In New Zealand, you can claim motor vehicle expenses if you’re using a motor vehicle for business. You need to complete a log book with the kilometres driven and the reason for the trip so you can claim the mileage. A bit more record keeping could give you additional tax deductions,” Shackelford says.

Depreciation of assets

“Some small businesses miss out on the depreciation expense if they don’t account for their asset purchases, like computers,” Webber says. “In New Zealand, it’s a 50% depreciation rate.”

Networking events

“Lots of people go to networking groups and if there was a cost, like food or wine purchases, a percentage of that could be deductible,” Webber says.

Keep records

“People who are GST-registered might be more likely to have an accountant,” says Webber. “But when they’re not registered and doing it all themselves, some expense claims might fall through the cracks, mainly because they’re not filing returns and claiming more regularly.”

She adds, “Another thing to watch out for is if you have, say, three bank accounts and a credit card you might miss a few deductions because you’re paying for stuff all over the show. It makes it a bit harder to collate your information.”

If any of these deductions sound like they might apply to your small business, speak to your tax advisor for personalised advice on what your business might be eligible to claim.

Keen for more tips to help boost your small business? Sign up to the Prospa Blog newsletter.

Primary CTA illustration
You believe business loans should be simple. We believe it too. That's why we offer a hassle-free approach to business loans with funding possible in 24 hours.
Apply today
Primary CTA icon
You believe business loans should be simple. We believe it too. That's why we offer a hassle-free approach to business loans with funding possible in 24 hours.

The information on this website is provided for general information only and does not take into account your personal situation. You should consider whether the information is appropriate to your needs, and where appropriate, seek professional advice from financial, legal and taxation advisors. Although every effort has been made to verify the accuracy of the information as at the date of publication, Prospa, its officers, employees and agents disclaim all liability (except for any liability which by law cannot be excluded), for any error, inaccuracy, or omission from the information for any reason, including due to the passage of time, or any loss or damage suffered by any person directly or indirectly through relying on this information.

Keep reading

Tips on managing working capital for resilience and growth

08 June 2021 | 5 min read

Understanding and managing working capital is critical to small business resilience and success. Here are simple tips to help manage working capital like a pro.

View more

Four ways to chase payments without losing relationships

18 March 2021 | 4 min read

Find out how small business owners are balancing the tricky task of chasing payments for EOFY with maintaining relationships when times are tough.

View more

How the tourism industry is preparing for 2021

07 December 2020 | 5 min read

While Kiwi tourism businesses have had a tough 2020, there's plenty you can do to help make 2021 your for the taking – just ask these experts.

View more

Subscribe to the Prospa Blog

Be inspired! Sign up to Prospa’s newsletter to receive tips, tools and small business success stories straight to your inbox.