Your Guide To Fuel Tax Credits
If your brand or business is on the road a lot, or perhaps requires machinery to get the job done, then it's important to understand how fuel tax credits work.
Did you know that if your brand or business uses vehicles or fuel-operated equipment on or off-road in Australia, you’re entitled to claim rebates on some - or even all - of the fuel tax that you have paid?
On a global scale, petrol and diesel prices are sitting at sky high records. As a business or individual, it makes sense to claw back as much of these expenses as one possibly can. Providing that you know the rules and how to best deploy this resource, this is where fuel tax credits can be a gamechanger.
Five Common Fuel Tax Credits FAQs
In simple terms, fuel tax credits provide businesses with a rebate for the fuel tax paid at the bowser or pump in order to run heavy vehicles, light vehicles, machinery, plant and equipment. Excise or custom duty is paid at the pump and then refunded to businesses by the Australian Tax Office via a Business Activity Statement (BAS).
Fuel tax credits are available to any business that uses fuel to power vehicles needed to keep their brand running, including small operators and owner drivers. While fuel tax credits provide a window of opportunity to claw some of these costs back, many business owners still have a medley of questions linked to what they can and can’t claim.
Are All Types Of Vehicles Eligible? No. As a general rule, fuel tax credits apply to light and heavy vehicles used on public roads and private property, and the use of auxiliary equipment such as concrete trucks, compressors, air conditioning and refrigeration units. Aircrafts, light vehicle travel on public roads and personal use of fleet vehicles are excluded from the rebate.
Are On And Off Road Claims The Same? No. Most businesses only use the standard on-road fuel tax credits rate of 16.9 cents per litre of fuel, regardless of whether the fuel was used on public roads or off-road. However, off road fuel tax credits can be as high as 42.7 cents per litre, so keeping diligent records can provide a noteworthy difference.
Do Fuel Tax Credits Apply For Owner Operators? Yes, provided that you are able to meet the relevant emissions related components of the vehicle in a reasonable manner, and that you are able to maintain the applicable servicing requirements. Regardless of your industry or sector, proof may be required in order to make a claim.
Does Plant Equipment Need To Be Registered? No. Plant type equipment used for the business, such as graders, cherry pickers and excavators are considered special purpose vehicles not ordinarily used on a road. The environmental criteria does apply to diesel motor vehicles of a kind ordinarily used for transporting passengers or goods.
What Kind Of Records Need To Be Kept? Like any tax claim, record keeping is important in order to be able to verify your claim should you be audited by the Australian Tax Office. While the government provides some templates, when in doubt, partner with a reputable accountant who can provide the right types of insights and information.
To make a claim for fuel tax credits, your business must be registered for GST when the fuel is acquired, and your business must be registered for fuel tax credits when the claim is lodged. Once these are both actioned, a brand or business can claim fuel tax credits for eligible fuel acquired, manufactured or imported and used in your business.
Fuel tax credits rates also change regularly, so it's also important to check the rates each time you submit your BAS. If you’re not sure about your legal or tax obligations when trying to claim fuel tax credits, it’s always wise to speak to the professionals to avoid landing yourself in hot water - but where do you find them?
Sourcing Help With Managing Your Tax Obligations
Whether you’re starting a business, purchasing an existing one, or even reevaluating where your current enterprise stands - all require some form of financial know-how if you hope to successfully navigate your legal tax requirements as well as hitting your financial and business goals.
However, if understanding the legalities that surround your business or finances isn’t your strong point, then it may be reassuring to know that you’re not alone. In fact, many businesses (big and small) enlist the services of an accountant in order to free up their time while knowing that their financial obligations are already taken care of by the professionals.
Ultimately, the team at Muro believe that every business owner is an entrepreneur. However, accounting does not discriminate - finances break down barriers and are not territorial. If you would like to take a deeper look into your finances, please get in touch with us at Muro today to ensure that you’re on the right path for success.