Fuel Tax Credits – What is fair and reasonable?

At the time of writing Fuel Tax Credit rates are:

• 19.1 cents per litre for propelling heavy vehicles (GVM greater than 4.5 tonne) on a public road – on road rate; and
• 49.6 cents per litre for all other business uses – full rate

The relevant legislation does not specify any method for claiming Fuel Tax Credits for GST registered entities.  Our friends at the ATO have stated that they will accept any method that is fair and reasonable in a particular claimants circumstances when apportioning between on road and full rate use.

The issue then becomes what is fair and reasonable in your circumstances?

Fuel Tax Credit claimants should be claiming the full rate when not propelling their heavy vehicle (“HV”) on a public road.  A couple of examples would be entering a quarry or a farm to pick up or deliver goods such as aggregate, grain or livestock.

During harvest it would not be unusual to queue at a bulk grain handling facility for well over an hour to load or unload.  The same scenario would apply to picking up or unloading quarry products.

All fuel used in the above examples should be claimed at the full rate, not the on road rate.  Claiming at the full rate would mean an extra 30.5 cents per litre off the bowser price.

The key is to use an apportionment methodology that maximises your Fuel Tax Credit entitlement and, is fair and reasonable in your circumstances. The more fuel that you can claim at the full rate equals more Fuel Tax Credits for your BAS to offset other ATO payments.

What is fair and reasonable for one claimant may not be fair and reasonable for another claimant when it comes to claiming Fuel Tax Credits.  To illustrate, the ATO accepts that technology based reports provide satisfactory data for the purposes of claiming Fuel Tax Credits.  However, does this mean they will discriminate against other claimants, who for whatever reason, choose not to use technology based reporting for claiming Fuel Tax Credits?

We are currently dealing with the ATO on this very issue.

If you believe your enterprise is under-claiming Fuel Tax Credits contact us via email at ftcnational.com.au or call or text 0494 021 084 and utilise our “no win no fee” policy.