Nearly half of all sole traders are leaving valuable tax savings on the table, despite rising fuel prices and a higher cost of living.
New research from Hnry’s Sole Trader Pulse shows 49% of sole traders aren’t claiming all the expenses they’re entitled to under IRD rules, missing out on tax relief at a time when every dollar counts.
The survey, which polled 500 Kiwi sole traders, highlights a disconnect between rising costs and financial behaviour — with many respondents citing a lost or incorrect receipt as a reason for not claiming expenses.
At the same time, fuel prices have climbed sharply, placing additional strain on sole trader businesses. Hnry’s internal data shows that this is already changing behaviour, with 32.5% fewer business trips raised in the second week of February, compared to the same period last year.
While some sole traders can reduce their travel to offset costs, others – particularly tradies – have little choice but to absorb the higher expenses or pass them on to customers.
Rising household costs
Recent inflation statistics released by Stats NZ paint a challenging picture for everyday Kiwis. Inflation reached 3.1% in the December 2025 quarter, with the Reserve Bank anticipating a further increase to 4.2% by June – the highest rate since December 2023.
While inflation is rising overall, certain household costs have been hit harder than others. Annual food prices are up 4.5% year on year, driven mainly by meat, poultry, and fish (up 7.5%) and fruit and vegetables (up 9.4%).
For sole traders, these rising household costs only add to the pressure – making it even more important to claim every expense they’re eligible for.
The effect of rising fuel costs on sole trader businesses
Rising fuel costs are directly affecting the way sole trader businesses operate. Over the past few months, the cost of regular 91 petrol has increased from around $2.57 in January to around $3.42 in March – up 33% in just two months. Diesel has risen even more sharply – up from $1.90 to $3.43. That’s a whopping 80% increase.
Hnry’s internal data makes the knock-on effects clear. Among a cohort of Hnry users who log mileage expenditure, business trips dropped by 32.5% in the second week of February compared with the same period last year. Total distance travelled by this group fell by 50.5%, suggesting that many sole traders are drastically cutting back on long-distance travel to manage costs.
Not all sole traders have that option, and tradies are a prime example. Unlike other sole traders, the data shows only a minor 5.5% decrease in activity for the same period. Instead, the average cost per fuel transaction dropped by 23.1%, from $81.03 to $62.29 – which suggests NZ tradies are managing the crisis by making smaller, more frequent fuel purchases to keep cash flow in check.
Why sole traders aren’t claiming expenses – and why they should
In this context, the fact that half of sole traders are leaving tax savings on the table is hard to swallow.
Top reasons cited by sole traders surveyed include:
- A lost or incorrect receipt (34%)
- The tax savings not being worth the effort (32%)
- Being unsure what they can and can’t claim (29%)
The good news is that these are all solvable issues. In fact, it’s exactly why Hnry was created: We wanted to make it as easy and as straightforward as possible for sole traders to sort their taxes, including getting all the tax relief they’re eligible for.
Very simply, claiming eligible business expenses lowers a sole trader’s taxable income. By claiming $5,000 in eligible, fully deductible expenses, a sole trader earning $75,000 in self-employed income would then only be taxed on $70,000 of income.
This in turn lowers the amount of tax owed. A sole trader in the above example could potentially save around $1,500 in income tax depending on their marginal tax rate – which could make a real difference as costs continue to skyrocket.
📖 For more information, check out our comprehensive guide to claiming business expenses.
Managing expenses made easy with Hnry
Hnry was created specifically with sole traders in mind – which is why our functionality solves all three of the top claiming issues mentioned above, and then some.
For the 34% of sole traders who don’t claim due to lost or incorrect receipts, Hnry’s Expenses feature lets you raise expenses on the go. You can upload a photo of your receipt immediately after purchase, along with a few additional details, and submit it on the spot. We’ll manage it all from there, including storing your receipt for the required seven years, and reflecting all eligible expenses in your tax calculations.
For the 32% of sole traders who say it’s not worth the effort, our Hnry Debit Card makes the process effortless. Every time you make a business purchase using your Hnry Debit Card, it automatically raises an expense in the Hnry App, ready for you to review and submit – never let an expense slip through the cracks again!
Got vehicle expenses? Mileage by Hnry automatically tracks your vehicle usage, making it easier for you to review and raise work-related trips as an expense in the Hnry App. It’s the easiest way to stay on top of your vehicle expenses, and get all the tax relief you’re entitled to. As fuel costs continue to rise, every bit helps.
Finally, the 29% of sole traders who aren’t sure if they’re claiming correctly can rest assured that the crack team at Hnry is managing their expenses for them. Our sole-trader tax specialists are well versed in IRD rules, meaning they can give you guidance around what the IRD likely will and will not accept.
Hnry supports sole traders
Hnry is an award-winning tax app and service. For just 1% +GST of your self-employed income, capped at $1500 +GST a year, Hnry will calculate and pay all your taxes, levies and other obligations, including:
We also file your income tax and GST returns for you – it’s all part of the service.
Basically, we make earning self-employed income easy by taking care of all your tax admin. Join Hnry today, and never think about tax again!