Fuel Tax Credits can make a big difference to your bottom line … but are you missing out?

Have you heard of Fuel Tax Credits? They are part of the Australian Government’s fuel schemes, which provide credits and grants to reduce fuels costs, as well as providing benefits to encourage the recycling of waste oils.

Fuel Tax Credits provide businesses with a credit for the Excise or Customs Duty included in the price of the fuel they use in their business activities. This can be a substantial source of income for many Australian businesses, but unfortunately a lot of you are missing out.

Perhaps you hadn’t even heard about this deduction?

Maybe you’ve assumed you wouldn’t be eligible? Or maybe you’ve been claiming them incorrectly and not getting anywhere near your full entitlement?

You’ll be pleased to know that most businesses are eligible for Fuel Tax Credits. However, the rate will vary depending on your particular business activities, as well as the types of fuel you use. The latest rates for different fuel types and business uses can be worked out for you with the ATO’s Fuel Tax Calculator.

As it’s a refund for a road-user charge that doesn’t apply to businesses, this rebate is a legitimate financial input for your business. Even a small gain can make a big difference to your bottom line, so let’s start talking about your Fuel Tax Credit situation today!

What business activities can I claim for?

You can claim fuel tax credits for eligible fuel you acquired, manufactured or imported, and have use in your business. There are many eligible business activities, which include road transport, construction, manufacturing, agriculture, fishing, forestry, electricity generation, landscaping, panel beating, quarrying, and using cement kilns and industrial furnaces.

Some questions to ask yourself

  1. Does my business use diesel in agricultural or mining industries?
  2. Do I use a generator?
  3. Do I use a diesel-powered burner in my business ?
  4. Does my business purchase biodiesel? 
  5. Does my business run a diesel, petrol or gas-powered vehicle?
  6. Do I run heavy vehicles or auxiliary equipment?

What kinds of fuels are eligible?

Eligible fuels are those which include excise or customs duty in the purchasing price. Some of these eligible fuels are liquids, some are gaseous, and some are fuel blends. When it comes to fuel blends, the rate you can claim will depend on the amount of biodiesel or ethanol in each blend.

The main eligible liquid fuels are petrol and diesel, but also include other fuels such as kerosene, mineral turpentine, white spirits, toluene and heating oil, as well as some solvents.

Eligible gaseous fuels include liquefied petroleum gas (LPG), liquefied natural gas (LNG), and compressed natural gas (CNG). Gaseous fuels are sold as either transport gaseous fuels, or non-transport gaseous fuels. Only the transport gaseous fuels are eligible for Fuel Tax Credits, although non-transport gaseous fuels were eligible for some activities before 1 July 2014. Since this date, the sale of non-transport gaseous fuel will contain the following on the invoice:

 “Not to be used, or supplied, for transport use. Penalties apply.”

The ATO website has more information about transport and non-transport fuels and their eligibility requirements.

Ineligible Fuels

In addition to non-transport gaseous fuels, some other fuels are not eligible for Fuel Tax Credits. These ineligible fuels include aviation gasoline and aviation kerosene, as well as fuel additives like diesel exhaust fluids. These fuels are not eligible because they are not taxable fuels, meaning they have had no excise or customs duty paid on them.

Backdated claims

Would you like to lodge a claim for fuel purchased for your business in the past? You may be able to claim Fuel Tax Credits for fuels used in your business activities and acquired from December 1 2011. If you think your business may be entitled to a backdated Fuel Tax claim, talk to a business tax expert about a Fuel Tax Credit review and lodging a backdated claim.

Non-business Fuel Tax Credits

In addition to your business activities, you may also be eligible to claim Fuel Tax Credits  for using a generator at home, as well as running any not-for-profit emergency vehicles and vessels .

The ATO also has an eligibility calculator for non-business Fuel Tax entitlements, but if you’re still unsure – ABA are always available to chat about your situation. We’re happy to help with obligation-free advice, but we also guarantee the maximum legal return for our individual tax clients – minus the headache!

How to Claim

  1. Use the ATO’s eligibility calculator to confirm that you are entitled to this rebate.
  2. Use the rate calculator to work our exactly what your entitlements are.
  3. Make sure you are registered for GST.
  4. Make sure you are registered for Fuel Tax Credits.
  5. Talk to your Gold Coast business accountant about claiming Fuel Tax Credits on your next Business Activity Statement (BAS).
  6. Enjoy your bigger, better bottom line!

Running a business is hard enough without missing out on one of your biggest tax entitlements as well! If you are entitled to this rebate, it’s important to be sure you are claiming it at the correct rate according to the latest legislation. 

A business tax specialist can ensure you’re claiming 100% of your litres used, as well as claiming the correct on-road rates, all while keeping you up-to-date with the latest legislation. This is a highly specialised area of business taxation, so don’t hesitate to talk to a business tax expert in Southport today!

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