Fuel Tax Credits: don’t miss out on business fuel savings.

From 30 March 2022 to 28 September 2022, a temporary reduction to the Fuel Tax Credits (FTC) available to businesses was in force. This was due to the temporary decrease in fuel excise duty. With this temporary reduction now lifted, now is a great time to review the eligibility of your business to claim fuel tax credits and maximise your claim.

What are Fuel Tax Credits?

Fuel Tax Credits provide businesses with a credit for the fuel tax (excise or customs duty) included in the price of fuel used in:

• machinery
• plant
• equipment
• heavy vehicles
• light vehicles travelling off public roads.

These fuel tax credits effectively enable an eligible business to obtain an effective discount on fuel used in eligible activities of up to 46 cents per litre, with these rates periodically being increased.

A business must be registered for GST to claim FTCs in its monthly or quarterly business activity statement.

Eligible fuels can include both liquid fuels, such as petrol, diesel, and kerosene, along with gaseous fuels, such as liquefied petroleum gas, liquefied natural gas and compressed natural gas.

Rates

Fuel tax credit rates are indexed and updated twice a year, while fuel used for heavy vehicles may also change in July each year, along with biodiesel rates, due to an increase in excise duty rates for this fuel type annually at this time.

The rates for claiming FTC vary depending on whether they fall into either road transport, or all other business uses.

Eligible Activities

Road Transport

• Road Transport - involves fuels you use in heavy vehicles, including heavy emergency vehicles, travelling on public roads if the vehicle meets all the following conditions:
  • It is used in carrying on a business.
  • It has a gross vehicle mass (GVM) greater than 4.5 tonnes
• Fuel used in a heavy vehicle for;
  • Idling on a public road
  • Powering the air conditioning unit of the main cabin when travelling on a public road

All Other Business Uses

• Movement along public roads – the movement of a vehicle undertaking road construction, maintenance, or repair
• Light vehicles travelling on private roads
• Machinery, plant, and equipment
• Power auxiliary equipment of a heavy vehicle

Prior Period Adjustments

Where Fuel Tax Credits have been incorrectly claimed or omitted altogether, a business may be able to claim them in a later BAS, however, time limits apply.

If you are looking for more information on eligibility for fuel tax credits, contact Link Advisors. We can assist your business to assess if it is missing out on valuable fuel tax credit claims.