At Xebra, we work closely with New Zealand leading courier and transport brands and we are familiar with the day to day issues that their owner drivers face. Here is a summary of some of the key issues.
The courier company produces a detailed summary of income earned each month and you will receive payment on the 20th day of the month following.
Goods and Services Tax (GST)
As an owner driver you should be registered for GST, as your income is highly likely to be over the $60,000 per year threshold. However, at Xebra we believe that owner drivers earning under this amount should still seriously consider a voluntary registration as it means that they are able to deduct GST on their expenses and fixed assets such as your motor vehicle. If you are unsure contact us on firstname.lastname@example.org, however for the purposes of this fact sheet we will assume that you are registered for GST.
Telephone and Internet
The cost of your mobile telephone can be claimed 100%, and you can also claim a proportion of your home telephone and internet. This proportion needs to be thought through, although in a lot of cases it will be at least half (if not more). At Xebra, we recommend that these payments be made from your business bank account so that the cost can be captured simply and the appropriate apportionment made.
Use of Home Office
It is highly likely that you will operate from home. When this is the case the Inland Revenue Department allow a deduction for the cost of this. You will need to work out the area of your private home (whether owned or rented) that you use for this purpose. Say you decide that 20% is a reasonable proportion for business use, and then you can claim 20% of household rent, mortgage interest, insurance, power, cleaning etc. etc.
Second Hand Goods
As an owner driver just starting out, don’t forget that you can claim GST and depreciation on assets that were used for private purposes, which are now used for business. Commonly this could be a laptop for business records that you acquired before starting out and you will use for the business. GST can be claimed on the market value of the laptop. For example, you brought a new laptop six months before you starting and it cost $1,900 (incl GST). When you started out the value is estimated to be $1,500. This means you can claim GST of $195 in your first GST return. The same would apply for your mobile telephone, office desk etc.
Motor Vehicle Costs
This will be your largest cost. Most courier operators provide a fuel card for purchases and this amount is traditionally deducted from the income you receive. You will be emailed a copy of this, which needs to be emailed to us at Xebra each month.
Work Related Clothing
In order to claim a tax on clothing worn for work purposes, it must be branded and also the type of clothes that would not be worn for other purposes. For example, a polo shirt with your name and brand prominently displayed would be taxed deductible, along with protective clothing that may be required.