Why You Should Review Your Businesses Eligibility for Fuel Tax Credits (FTCs)

With your business, you are constantly looking for ways to improve your bottom line and stay competitive in your industry. One area that you may not have considered is Fuel Tax Credits (FTCs). A Fuel Tax Credit review conducted by LINK Advisors can help you identify if your business is eligible to claim these credits each quarter when preparing your Business Activity Statement (BAS).

If you use fuel in your business you may be eligible to claim between 20.5 c/L and 47.7c/L on diesel and unleaded, and 15.6c/L on LPG (rates as of February 2023). Generally, fuel used in anything except vehicles under 4.5t GVM is eligible for Fuel Tax Credits. This includes trucks, machinery, stationary engines, generators etc.

Why you should do a Fuel Tax Credit review

One of the key benefits of a Fuel Tax Credit review is the ability to backdate your eligible claims. This means that you could potentially recoup 4 years’ worth of missed Fuel Tax Credits from the Australian Taxation Office (ATO). Furthermore, with many of your competitors likely having completed a review, it is important to ensure that you are not losing out on potential business due to a difference in quoting structure where your competitors are factoring in Fuel Tax Credits, but you are not.

One often overlooked area of the Fuel Tax Credit rules is that fuel used in a truck may be claimed at 2 different rates – a lower rate for the fuel used by the engine for movement on roads, and a higher rate to run auxiliary equipment like refrigeration units and concrete agitators.  A Fuel Tax Credit review can help you identify where this apportionment can potentially add up to thousands of dollars in extra Fuel Tax Credit claims. This can make a big difference, as even small percentages can add up when you are using lots of fuel. The review will also educate you on best practice methods for identifying and documenting fuel usage to maximise your Fuel Tax Credit claims.

How much will it cost you to do a review?

The best part of conducting a Fuel Tax Credit review is that there is no upfront charge. We will explore your eligibility and prepare any eligible backdated claims. Our fee is charged based on the amount of Fuel tax Credits we can recover for your business and this rate is agreed in advance.

If you aren’t eligible for any credits, then no fee is charged. Your benefit will always be greater than our fee to claim it for you – in many cases, these backdated Fuel Tax Credit claims can see refunds of thousands to tens of thousands of dollars. We will do our best to claim every credit possible to maximise your financial benefit.

Why you may be only hearing about this now

Fuel Tax Credits are not like other areas of tax and the vast majority of accounting firms simply don’t have enough clients to allow them to get sufficient exposure nor do they have the appropriate level of experience to be able to properly advise on Fuel Tax Credits. This is why it is important to work with a specialist like LINK Advisors that have experience in this area and can help you navigate the complex regulations and maximise your claim.

How big will your Fuel Tax Credit claim be?

It’s a case-by-case scenario and it really depends on what your business does plus the type and amount of fuel you use.

As of February 2023, the off-road Fuel Tax Credit rate for diesel and unleaded is 47.7c/L and the on-road rate is 20.5c/L. This will give you an idea of the potential claim available to you. Given the rate is so high, it's worth claiming Fuel Tax Credits for your business each quarter even if your eligible fuel use is modest. You don’t need to be a large trucking company to benefit from Fuel Tax Credits.

How to proceed from here

A Fuel Tax Credit review can help your business identify potential unclaimed credits, stay above the competition and ensure compliance with the ever-changing legislation going forward.

LINK Advisors will give you a simple method for staying on top of your Fuel Tax Credit claims so you don’t miss out on any claims in the future.

If you use fuel in your business, you may be eligible to claim Fuel Tax Credits. Contact a LINK Advisors Fuel Tax Credit specialist to discuss a Fuel Tax Credit review + ongoing claims in your future Business Activity Statements.