What are Fuel Tax Credits?
Fuel tax credits provide your business with a credit for the fuel tax (excise) included in the fuel price. The excise is paid at the pump and, subject to certain conditions, refunded by the Australian Tax Office (ATO) via your BAS. It’s not a full refund of fuel tax if the fuel is used by heavy vehicles on public roads, as deducted from the refund is the government-imposed road user charge.
What has changed?
The fuel tax credit rate has been temporarily reduced (from 30 March to 28 September), resulting in 0c per litre for heavy vehicles travelling on public roads.
This is because the road user charge exceeded the excise duty paid, reducing the fuel tax credit rate to nil. This does not apply to fuel used in auxiliary equipment or while travelling off a public road (the halved fuel excise rate was claimable for this fuel as a fuel tax credit). Here are the details:
| Previous rates | Current rates | |
| FTC Rates used in heavy vehicles for travelling on public roads | 30 March to 28 September 2022 | From 29 September 2022 |
| Cents / litre | Cents / litre | |
| Fuel Excise | 22.1 | 46 |
| Road User Charge | 26.4 | 27.2 |
| ‘On-road’ Rate | 0 | 18.8 |
What are ‘off-road’ areas for FTC?
Off-road areas are considered to be any locations off a public road, for example:
| · Vehicle depot · Farm · Mining site · Quarry | · Logging site · Construction site · Loading dock · Council refuse site |
Claim more with Auxiliary use
If your business uses fuel to power auxiliary equipment, you can claim up to 46 cents per litre for that fuel. The FTC Rate for auxiliary use is not reduced by the road user charge, even if this takes place on public roads.
ATO Safe Harbours
The ATO has provided various safe harbour percentages to assist in calculating fuel used in auxiliary equipment. This includes a 5% rate for air-conditioner units that moderate the temperature of a vehicle’s sleeping compartment when the driver is on a sleeping break during a long-haul trip. The vehicle must use fuel to power the air conditioner during the sleeping break of a long-haul trip.
What does it mean for my business? Can I make a retrospective claim?
If you have either under-claimed in previous periods at the standard on-road rate or not at all, you may be entitled to claim retrospective FTC rebates.
What do I need to do to make an FTC retrospective claim?
Information required includes how much fuel was acquired and how the fuel was used (e.g. off-road activity). If you have not kept records of that over the past four years, capture a consistent pattern across an appropriate sample time period. This can then be used to make a retrospective claim on off-road use for the previous four years on the basis your operations have remained consistent throughout this period.
Even if you’ve previously submitted a claim, if you can show usage data that indicates the previous claim was understated, it can then be used to claim off-road FTC rebates for up to four years.
Where to get help?
Most businesses underestimate claims due to the lack of evidence. As a result, many organisations underclaim their entitled rebate in fear of being unable to validate theirs with the Australian Taxation Office.
