Fuel Tax Credits
Did you know that some businesses can claim Fuel Tax Credits back from the Australian Tax Office (‘ATO’) when they lodge their Business Activity Statement (‘BAS’)? Are you a farmer, fisherman, truckie, builder or miner? It’s worth finding out if the ATO owes you money!
There is a Fuel Tax Credit Eligibility Tool on the ATO’s website that works out if you can claim money back on the fuel you buy for your business. Generally though, here’s a guide of fuels that are claimable:
- Vehicles used on public roads with a GVM over 4.5 tonnes in the Road Transport industry;
- Vehicles (and boats) NOT used on public roads in the Agriculture, Fishing, Mining, Construction and Manufacturing industries;
- Packaging and supplying fuels such as kerosene, LPG and some liquid fuels into small, usable quantities may be eligible.
If any of these apply to you, have a cuppa with your accountant or bookkeeper and check that you meet any other criteria that applies, and are claiming everything that you are entitled to.
You can then claim a certain rate per litre on your monthly or quarterly BAS. There are different rates for different situations.
From 1 July 2014 you could claim 12.003 cents per litre on fuel for heavy vehicles on public roads used for road transport. On 10 November 2014 this rate increased to 12.46 cents per litre.
From 1 July 2014 you could claim 38.143 cents per litre on fuel for farming machinery for on-farm use. On 10 November 2014 this rate increased to 38.6 cents per litre.
As a basic example, if farmer Spud spent $500 on diesel in December 2014 to fuel his tractor, harvester and unregistered farm ute, he would need to look on the docket for the number of litres purchased. Spud found that he had bought 330 litres, so he got out his calculator and punched in the following:
330 x $0.386 = $127.38
As the ATO doesn’t care about cents, Spud would write $127 on the December BAS at 7D as money that the ATO owes to him. Isn’t it great to claim money back!
WARNING – A common mistake is to calculate these rates per dollar spent, instead of the number of litres purchased. Be careful with that.
The ATO often changes the legislation regarding Fuel Tax Credits, so keep in touch with your accountant or bookkeeper to ensure that you are compliant. Last month I had a lovely random phone call from the ATO, requesting to see all tax invoices to support the Fuel Tax Credit claim I had made on the previous BAS. This does actually happen, so make sure you keep your paperwork and claims above board!
Amanda Wolff | Bookkeeper | The Money Edge | Bundaberg