Fuel Tax Credits - Tips to Avoid Common Mistakes

5 tips to avoid common mistakes when claiming fuel tax credits:

1. Justify your claim with accurate records
Keep accurate records of your fuel purchases and how the fuel is used in your business.

2. Only make claims for eligible fuel types and usage
You can’t claim fuel tax credits for all fuel types or fuel usage.

3. Meet environmental criteria
If you use a heavy diesel vehicle on a public road and your vehicle is manufactured before 1 January 1996, you must meet one of the environmental criteria to claim fuel tax credits. For example, you can do this by servicing your vehicle in line with the manufacturer’s maintenance schedule or endorsed generic schedules and keeping your records.

4. Apply the correct rate
The correct rate is:

  • 17.143 cents per litre for fuel you use in vehicles with a GVM greater than 4.5 tonne travelling on a public road
  • 38.143 cents per litre for fuel used in specified activities that have been elgibile since 1 July 2006
  • 19.0715 cents per litre for fuel used in other activities, machinery, plant and equipment.

Check the current rates.

The diesel vehicle GVM can equal 4.5 tonne if you acquired it before 1 July 2006.

The rate of 19.0715 cents per litre is 50% of the full rate of 38.143 cents per litre. The full rate will apply to all these activities from 1 July 2012.

5. Calculate your fuel tax credit amount
Don’t claim the amount you paid or the number of litres of fuel you bought.

Work out your fuel tax credits using this formula:

Litres of eligible fuel x Relevant fuel tax credit rate = Fuel tax credits

Write this amount at label 7D on your business activity statement. Keep records of your calculations.

(source: Extract from ATO NAT 70439-01.2009)

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