Work Related Vehicle Rules: Signage, Letter, Private Use Days
Work related vehicle rules (WRV rules) for signage, the restriction letter, and private use days sit on Inland Revenue’s FBT exemptions for motor vehicles page and in Fringe benefit tax guide IR409. FBT does not apply to any day a vehicle provided to an employee is classified as a work related vehicle. That label is day by day. You must meet all of the requirements and keep records. A logo on the door does not finish the job on its own.
This page is the operating manual for three of those tests: permanent prominent business identification, written notice of private use limits, and the days that still attract FBT. Design, mechanical power, and the 3,500 kg gross laden weight test still apply. A double cab is not automatically exempt. The rest of the ute myth sits on the companion guide.
| WRV rule | What Inland Revenue requires | What fails |
|---|---|---|
| Signage | Permanent and prominently displayed business identification regularly used by the employer (or the owner if rented) on the exterior. Logos and acronyms count. | Magnetic or removable signs. IR409: signwriting on a removable canopy or spare wheel cover is not permanent identification. |
| Letter | Written notice that the vehicle is not available for private use, except home to work that is necessary in and a condition of employment, or incidental to business travel (pharmacy on the way home). IR409 wants the actual days named. | No letter. A clause that says any 2 days in a week. IR409: that means the vehicle is available on any day, and full FBT would apply. |
| Private use days | The exemption does not apply to any day the work related vehicle is available for private use, even if the employee does not use it. Weekends and statutory holidays are named examples. | Treating kilometres as the test. Treating a driveway Saturday as free because nobody drove. |
Sources: Inland Revenue FBT exemptions for motor vehicles, about FBT for motor vehicles, record keeping, and Fringe benefit tax guide IR409 2026.
What signage does Inland Revenue count?
Permanent, prominent, on the exterior. Inland Revenue’s FBT exemptions for motor vehicles page: the vehicle must have permanent and prominently displayed business identification regularly used by the employer, or the owner if the vehicle is rented, on the exterior. This includes logos, acronyms and other business identification, but not magnetic or removable signs. IR409 repeats that list and adds the canopy and spare wheel cover examples.
A wrap that is stuck on and not designed to come off at the boat ramp can meet permanence. A magnet that lives in the glovebox on Saturday cannot. Signage is only one test. The ute still needs the design test and the other requirements on that day. The automatic exemption myth is covered in Work Related Vehicle Ute Exemption Myth.
Signage that fails
Magnetic door logos. Removable canopy writing. Spare wheel cover stickers. Identification that is not on the exterior. Identification the employer does not actually use in the business.
Signage that can pass
The business logo, acronym, or other identification regularly used by that employer, permanently and prominently on the outside. Rental vehicles need the owner’s identification if the employer does not sign write the hire unit.
What must the restriction letter say?
It must tell the employee the vehicle is not available for private use, except two Inland Revenue carve outs. Travel between home and work that is necessary in, and a condition of, their employment. Travel incidental to business travel, for example passing by the pharmacy on the way home. IR409: if a vehicle is available for private use on some days in the week, it does not qualify for the work related vehicle exemption on those days. The written notice must state the actual days. Example: Saturdays, Sundays and statutory holidays.
IR409 prints a sample letter. It names the vehicle, the registration, that the vehicle is for business use and is not available for private use during the week or weekend except home to work or incidental travel on company business, and that the employer will regularly check. Read the sample in Fringe benefit tax guide IR409. Deloitte and other advisers also use an employment agreement clause. Inland Revenue’s record keeping page still wants the private use restriction as a letter or notice on the file, plus 3 monthly checks for unauthorised private use, for at least 7 years after the end of the relevant income year.
Do not write any 2 days
IR409: you cannot just say any 2 days in a week, as this means the vehicle is available on any day, and full FBT would apply. Name Saturday and Sunday if that is the deal. Name the public holidays. Keep a record of the 3 monthly checks.
How do private use days work?
Availability, not kilometres. Inland Revenue’s about fringe benefit tax for motor vehicles page: FBT must be paid for every day that a motor vehicle is available for an employee’s private use, even if they do not actually use it. Private use includes travel from home to work and any other travel that benefits the employee personally, outside of their work. If the vehicle meets the work related vehicle definition, it is exempt if the only private travel is home to work necessary for their employment, or incidental to business use.
Weekends and statutory holidays that you allow as private are FBT days even if the van sits in the driveway. A fringe benefit day is a 24 hour period starting at midnight. IR409’s labelled overnight example: send the vehicle home at 5 pm and get it back at 8 am and 2 fringe benefit days would apply. You can elect a different 24 hour start in myIR. Inland Revenue: that election is for a minimum of 2 income years and applies to all vehicles you own or lease. File the dollar split for named private days on the FBT calculator. Register and return rules sit on FBT for employers.
Inland Revenue: the exemption does not apply to any day the work related vehicle is available for private use, even if the employee does not use it.
Use case: Dunedin panel van, magnet vs wrap
Situation: labelled Dunedin Ltd. Van with rear seats welded down. A magnetic door sign on weekdays. Sign comes off for the weekend.
Action: the magnet fails permanence on every day it is the only identification. Get permanent exterior identification the business actually uses. Then write the restriction letter. Design alone does not skip signage.
Use case: Wellington electrician, named weekend days
Situation: labelled Wellington Ltd. Permanent prominent identification. Letter says the van is not available for private use Monday to Friday except home to work that is a condition of the job. Saturdays, Sundays, and statutory holidays are named as available.
Action: those named days are FBT days whether or not anyone drives to the supermarket. Keep 3 monthly checks. Do not write any 2 days.
Use case: Christchurch overnight, midnight clock
Situation: labelled Christchurch employer. Occasional 5 pm home run, back at 8 am. No 24 hour start election in myIR.
Action: IR409 counts 2 fringe benefit days on that overnight. If the WRV tests hold on those days except the overnight private availability, still count the days Inland Revenue treats as available. Elect a 5 pm start only if that is the business pattern for at least 2 income years.
What else sits beside these three rules?
The exemptions page still requires mechanical power, gross laden weight 3,500 kg or less, and a design that is mainly goods, or goods and passengers equally. Vehicles above 3,500 kg are treated as unclassified benefits. Emergency call outs and business travel of a continuous period of at least 24 hours away from home with the vehicle are separate exemptions with extra records. A vehicle in the shop for at least 24 hours with a recorded reason is not available. An employee on stand by for an emergency call out does not qualify. They must actually attend.
Inland Revenue’s record keeping list for motor vehicles includes the letter or notice, 3 monthly checks, working papers for days FBT is payable and days it is not, and a description of the qualifying work related vehicle. IR409’s 3 month test period is a different tool: you can use a representative 3 month test to calculate FBT on that vehicle for the next 3 years. That test is about expected availability, not a substitute for the letter.
What people get stuck on
r/LegalAdviceNZ threads describe Inland Revenue noting sign written vehicles at Saturday sport. Availability on that Saturday is the test, not whether the logo looked official. r/PersonalFinanceNZ still treats a signed “no personal use” note as enough on its own. Inland Revenue wants the letter and the other tests on that day, plus 3 monthly checks. Forum advice that sign writing is optional fails the exemptions page. Forum advice that a supermarket stop licenses weekend private use overreads IR409’s incidental example: pharmacy on the way home while the vehicle is otherwise restricted.
Medium pieces selling magnetic car signs as marketing are not an FBT test. Accounting commentary that school pickup is always incidental is not on the Inland Revenue pages opened for this article. Stick to the pharmacy example unless your facts match incidental travel during business use. Taxathand’s utility vehicle overview was blocked this run. Deloitte’s New Zealand WRV refresher matches the live exemptions page on magnets, the letter, and FBT for two weekend days whether or not the vehicle is driven.