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What are fuel tax credits? What can I claim them for?
Fuel Tax Credits (FTC) provides big and small businesses with a credit for the fuel tax (excise or customs duty) that's included in the price of fuel used in machinery, plant and equipment, heavy vehicles over 4.5 tonnes, and light vehicles under 4.5 tonnes travelling off public roads or on private roads.
Claim fuel tax credits from the ATO
The Australian Taxation Office (ATO) offer Fuel Tax Credit entitlements to most businesses. This is because Fuel Tax Credits can be claimed for a wide range of business operations with the exception of the use of light vehicles operating on public roads.
The amount of Fuel Tax Credits you can claim in a tax return varies depending on when you acquire the fuel, what type of fuel you use, and how it is used.
Fuel Tax Credits can be claimed on public roads for heavy vehicles that operate on liquid or blended fuels such as: diesel, petrol, B5, B20, or E10.
Fuel Tax Credits are claimed on the Business Activity Statement (BAS) in a similar way to how you claim GST credits.
How much is a fuel tax credit?
The current Fuel Tax Credit Rates allow heavy vehicles to claim up to 16 cents per litre while on public roads, and up to 41.8 cents per litre for fuel used by ALL vehicles on private roads. That’s potentially an extra 25.8 cents you can claim for your heavy vehicles and the maximum 41.8 cents for your light vehicles for every litre of fuel you can prove was used off the public road network.
What can’t be claimed
Maximum FTC for heavy vehicles on public roads cannot be claimed because of the Road User Charge.
A light vehicle (less than 4.5 tonne) travelling on a public road is the main example of when a business is ineligible to claim FTC, however there are more instances where FTC isn’t eligible for your business that you should know about.
Fuel used for private purposes, fuel you haven’t used, and aviation fuels are all exempt from any fuel tax credit claims.
What is Road User Charge? And why does it matter?
The public road fuel tax credit claimable is equal to the maximum possible fuel tax excise minus the Road User Charge (RUC) of 25.8 cents per litre. This Road User Charge is only for public road use, that’s why on private roads you’re able to claim the higher fuel tax credit rate.
The Road User Charge is the amount the National Transport Commission have applied to every litre of diesel fuel used by heavy vehicles on public roads to recover their share of costs of providing and maintaining the public road network.
In November 2017, the Transport and Infrastructure Council agreed to freeze the RUC at 25.8 cents per litre until the end of 2019-20 financial year.
Prove auxiliary use to get the most out of your FTC claim
Vehicles that use fuel not only for travel but also for auxiliary use can also claim up to 41.8 cents per litre of FTC for all fuel they can prove was used to operate this auxiliary equipment. For example this includes ready-mix cement trucks rotating their agitators, a crane truck using it’s crane function, a tow truck using it’s winch or any other use of fuel that isn’t propelling the vehicle along the road.
Claim FTC in more places than you thought possible
You may also be able to claim the maximum fuel tax credits on private roads. So what constitutes a private road?
Private roads are anywhere that isn’t on the public road network. There’s undeniable off road locations like mine sites, farmland and deep in the bush that are all private roads because they’re so far off road, it’s clear. However there are a lot of private roads that are far less clear-cut.
Some of these less obvious private roads can include:
- Loading docks
- Public parks
- Your own workplace
- + many other built up areas.
This means you are entitled to the maximum claim of 41.8 cents per litre for all fuel used driving, idling or any other auxiliary activity that you can prove in these common locations.
Help save even more with retrospective claims
Whenever you claim your BAS you can also claim FTC. After claiming FTC for a couple periods and reviewing fuel usage and trends over that period, companies are able to claim a four-year retrospective BAS period in accordance with FTC legislation.
How Verizon Connect can help you claim
Proving how much fuel is used on a private road or in auxiliary use can be very difficult, especially when you’re not sure what counts as a private road for FTC claiming purposes.
Our GPS Tracking Solution tracks the boundaries between private and public roads, then creates an easy to understand report that details where fuel was spent.
This can take out the guesswork, help improve the accuracy of your Fuel Tax reporting, and helps maximise your Fuel Tax Credit claims.
The information contained in this document may or may not be correct and/or complete at the time of reading and is not intended to be used as a substitute for specific professional or legal advice or opinions. No recipients of content from this documents should act or refrain from acting on the basis of content of the document without seeking appropriate legal advice or other professional counseling.