Fuel tax credits: Recent changes and what you need to know

Tax Insights

After much confusion on eligibility to claim fuel tax credits when the federal government halved the excise on fuel in June 2022 on 29 September, the temporary reduction After much confusion on eligibility to claim fuel tax credits when the federal government halved the excise on fuel in June 2022 on 29 September.in the fuel excise levied by the federal government ceased.

This means that eligible fuel acquired by registered taxpayers on or after this date can make claims again, or at increased levels, in their activity statements, be it monthly or quarterly.    

 

On Road

Off Road

Liquid fuels – for example, diesel or petrol

18.8 cpl

46 cpl

Blended fuels - B5, B20, E10

18.8 cpl

46 cpl

Blended fuel - E85

No claim 

19.735 cpl

Liquefied petroleum gas (LPG) (duty paid

 No claim 

15 cpl

Liquefied natural gas (LNG) or compressed

natural gas (CNG) (duty paid)

 No claim 

31.5 cpkg

(cpl = cents per litre. cpkg = cents per kilogram)


For example, if you had filled your on-farm diesel fuel tank with 5000 litres on the 30th of September you would be eligible to claim $2,300 (5,000 litres at 46 cents per litre).

Experience has shown that many taxpayers are not claiming what they are entitled to regarding fuel credits. There is often a miscalculation of on-road versus off-road, which can make a significant difference in the amount of a claim.

For example, a heavy vehicle such as a truck and trailer delivering grain or fertiliser on farm would be able to claim a combination of the on-road and off-road amounts.

It is important to calculate the fuel burn while on farm unloading produce or product. We have seen this situation many times in the transport industry. Evidence of this calculation is essential if you ever have an ATO review. The ATO will request invoices detailing the fuel purchases and your claim methodology.

Excise rates and claim rates have increased with indexation occurring on 1 February and 1 August each year. The CPI indexation factor for rates from 1 August 2022 was 1.040. Watch this space for February 2023’s increase given the recent ramp up of inflation.

If you complete your own BAS, the easiest way to ensure you are using the correct rate is to use the free fuel tax credit calculator on the ATO’s website. Remember, your registered tax agent can help you with your eligibility and fuel tax credit claim.

For more information

RSM Australia have specialists in the landmine area of indirect tax. Should you need further clarification please contact your nearest RSM office.

RSM in Sydney - providing accountanting, auditors and consultants for sydney Businesses