Averaging method—how it works
13ZB Averaging method—how it works
This section applies if, under section 13Z(1)(b), the employer uses the averaging method to work out the number of exempt kilometres for a business vehicle.
The employer must keep the records mentioned in section 13ZC.
Note—
See the Administration Act, section 118 (Period for keeping records).
The number of exempt kilometres is the number worked out using the following formula—
where—
D means the total distance travelled by the business vehicle during the return period, worked out using the odometer readings mentioned in section 13ZC(3)(a).
K means the number of exempt kilometres.
RP means the relevant percentage for the vehicle.
The relevant percentage for the business vehicle is the percentage worked out using the following formula—
where—
B means the distance travelled by the employee in the course of business journeys undertaken by means of the vehicle during the averaging period for the vehicle, worked out using the odometer readings mentioned in section 13ZC(2)(a).
RP means the relevant percentage.
T means the total distance travelled by the vehicle during the averaging period for the vehicle, worked out using the odometer readings mentioned in section 13ZC(2)(d).
If a relevant percentage for the business vehicle is worked out on the basis of an averaging period for the vehicle, the number of exempt kilometres for the vehicle for a return period mentioned in subsection (6) must be worked out using that relevant percentage.
For subsection (5), the return periods are—
any return period falling in or comprising the financial year in which the averaging period falls or, if the averaging period falls in 2 financial years, the second financial year in which the period falls, other than a return period ending before the averaging period ends; and
the return periods falling in or comprising any of the succeeding 4 financial years after the financial year mentioned in paragraph (a).
Subsection (5) applies subject to section 13ZE.
The statute text is free to read above. View subscription options to unlock the case-law research tools for each provision.