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New telco rules for business, private use 01 May 2020

Inland Revenue has come up with some new rules on telecommunications.

Telcos now offer all sorts of plans, including ones which include use of your television and your internet. It’s now difficult to split out the cost of your telephone as a separate item.

The department has come up with the solution.

If you have “telecommunications tools and usage” mostly for business, you claim 75 percent of the cost. If the costs are mostly private, claim 25 percent of the cost.

Sometimes you might wish to reimburse an employee for use of their telephone, on a casual basis. You are allowed $5 a week per employee for this with a maximum of $265 in any year per employee. This is to cover situations where the employer needs to use the employee’s telephone. An employer might wish to be able to get hold of the employee by ringing their cellphone, for example.

Inland Revenue has expanded these rules to encompass computers as well.                                            

Compliance with the above is voluntary. If you can work out the actual cost you can use that. If you could show the usage was entirely for business, you could claim 100 percent of the cost.

The onus is on you to prove you’re right. Good luck if you can do it!

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