0402 459 653‬ cs@telematics-australia.com

What are ATO Fuel Tax Credits? (includes Fuel Tax Credit Calculator!)

Infographic

Fuel Tax Credits

Video

As we all know, the price of fuel includes tax. When you use fuel for specific business purposes, you can claim back this tax in the form of tax credits. Fuels eligible for ATO fuel tax credits include petrol, diesel, kerosene and LPG.  This article explains fuel tax credits, and how telematics systems can replace a homemade ATO fuel tax credits calculation worksheet.

Diesel Fuel Rebate Rates 2021

You can claim ATO fuel tax credits when you use fuel for business activities. The diesel fuel rebate rates depend on the use of the fuel.

Not Eligible for Diesel Fuel Rebate

You cannot claim fuel use in light vehicles of 4.5 tonne gross vehicle mass or less, travelling on public roads.

Eligible for Diesel Fuel Rebate Rate of 16.9 cents/litre (*rate valid until 30 June 2021)

Public roads are roads that are available for use by the general public. They include toll roads, bus lanes and so on. You can claim fuel tax credits for fuel you use in a heavy vehicle on public roads.

Eligible for Diesel Fuel Rebate Rate of 42.7 cents/litre (*rate valid until 30 June 2021)

You can claim a diesel fuel rebate for uses off public roads. For example –
  • Mines sites
  • Private roads
  • Site access roads
  • Construction sites
  • Farms
Some heavy vehicles are considered as being always used off public roads. For example –
  • Tractors
  • Graders
  • Combine harvesters
  • Fertiliser spreaders
  • Wheeled bulldozers
  • Forklifts
  • Wheeled excavators
  • Front end loaders
  • Backhoe loaders
  • Graders.
You can claim a diesel fuel rebate for fuels used in auxiliary equipment in your heavy vehicles. These are equipment and mechanisms unrelated to a vehicle’s travel on public roads. For example –
  • Truck refrigeration units
  • Mixing barrels of concrete trucks
  • Garbage bin lifters
The diesel fuel rebate rates change from time to time. Before claiming, you need to check not only the category but also the current rate.
 

How to Claim ATO Fuel Tax Credits?

You must register for both GST and fuel tax credits before you can make a claim. You can then register online through the Australia Business Register at abr.gov.au. If you already have an ABN, you can phone the ATO’s automated service on 13 72 26 or 13 28 66. When you call you will need your ABN and TFN.

 
You need records that include –
  • Purchased date, quantity and type of fuel
  • How you use that fuel in your business activities
  • How you calculate your claim
Telematics systems can help you automate this process (see below).
 

Claim ATO fuel tax credits on your Business Activity Statement

Use this fuel tax credit eligibility tool to determine if you are eligible for fuel tax credits. It also advises what rate you can claim.
 
If you claim less than $10,000 in fuel tax credits each year, there are various simplified methods that you can use. There is an ATO fuel tax credits calculation worksheet here.
 
ATO fuel tax credits count as business income, so you need to include them in your tax return.

 

ATO fuel tax credits

Many Organisations Underclaim their ATO Fuel Tax Credits

Many organisations underclaim their ATO fuel tax credits. This is because they don’t have a fuel tax credit calculator to help build their claim.
 
A detailed claim often requires a manual and error-prone process of information gathering. This information comes from several sources including driver logs, fuel records, and others.
 
To avoid this burden, many organisations use a simplified process. They assume all on-road usage, and use the low 16.9c/litre claim rate for all heavy vehicle fuel purchases. Off-road ATO fuel tax credits are worth over 2.5 times on-road credits. This means these organisations are likely underclaiming their tax credits.
 
It’s much better to use software such as a telematics system for high value fuel tax claims. These systems can help you track exact fuel usage. so you can make the highest possible claim.  They also minimise the administration effort.

 

You can make Retrospective Fuel Tax Credit Claims

You can claim ATO fuel tax credits within four years of the due date of the Business Activity Statement. (This is not considered to be a mistake.)  Retrospective claims must use the rates applicable when the fuel was purchased. A retrospective claim can be based on a current consistent six month pattern of fuel use. This means actual historical use data is not required. In some cases, making a retrospective claim has led to large one-off payments.

Telematics Systems help you claim the maximum ATO Fuel Tax Credits

Telematics systems capture detailed data about what a vehicle is doing.  You can prove when it’s been on or off public roads, when it’s been using auxiliary equipment, and so on. With this data, organisations can claim ATO fuel tax credits at the 42.7c/litre rate for –

  • heavy vehicles auxiliary equipment fuel usage
  • all vehicles offroad
  • idle offroad for heavy vehicles
  • Auxiliary equipment fuel usage

This is a 2.5 times better rebate. To see the impact, use the interactive rebate estimator below. You can use last year’s claim value, and adjust the slider to reflect the amount of fuel at the higher claim rate.

Fuel Tax Credit Calculator

Telematics systems enable you to establish a consistent pattern of business usage. You can use this pattern to make a retrospective claim of up to four years of under-claimed ATO fuel tax credits. (This is also shown in the calculator.)

How do Telematics Systems Calculate ATO Fuel Tax Credits?

  • The telematics system has a map of the Australian public road network. It normally assumes the road is 120m wide, so any vehicle use within that range is considered to be on public roads. Both the telematics system administrator and their customers can adjust the map. For example, to exclude private premises that are within the map’s definition of the public road. After approval these adjustments are included in the map for all users. Temporary adjustments (with a date range) can also be made. Examples would be in the case of a temporary road closure or construction site.
  • The customer creates a record for each vehicle in the telematics system. Details typically include registration number, vehicle type, fuel type, vehicle mass, idle fuel burn rate, and, if applicable, auxiliary equipment types, power methods and fuel burn rates.
  • A device is installed in each vehicle.  It records data including GPS location, auxiliary equipment use, and other relevant data
  • The device transmits data in real time from the device to the FMS via the telecom network. If the device is out of range the data is transmitted after the signal is restored
  • Actual fuel acquisition for each vehicle can be recorded in several ways. For example: manually, via file upload, or via interface from the fuel vendors
  • FMS users track the activities of the vehicle including location, engine status, auxiliary equipment status and so on.
  • Trip data is shown for individual trips and erroneous data is corrected or deleted
  • Automated alerts can be established to help identify erroneous data
  • Reports include registration number, vehicle type, auxiliary equipment, travel percentage on and off road, off road idling time, and auxiliary equipment running time
  • Summary reports include litres of fuel used for different types of travel, idling and auxiliary equipment used, within a tax period
  • These summary reports can be used to claim ATO fuel tax credits

Which Systems can help you claim ATO Fuel Tax Credits?

The following fleet management systems eliminate the need for a homegrown ATO fuel tax credits calculation worksheet –

ATO Class Rulings

An ATO Class Ruling means that a telematics system is approved for fuel tax credit calculations. If you use a system that has an ATO Class Ruling, the tax law must be applied as described in the ruling. If the ruling is incorrect, you are protected from paying any underpaid tax, penalty or interest

Benefits of Telematics Systems as a Fuel Tax Credit Calculator

  • You can automate your claim for fuel use for both powered vehicles and auxiliary equipment
  • You will not underclaim or overclaim. You will get every dollar owed to you
  • Your claims can be backdated by up to four years if you can show a pattern of consistent fuel use. This can mean significant one-time returns. You can backdate claims even if you have already made a claim at the lower rate.
  • You will reduce admin effort on making ATO fuel tax credit claims
  • You can more accurately claim ATO fuel tax credits for offroad fuel use, which are over 2.5 times more valuable than on-road credits
  • You can set up geofences to ensure your claim is the maximum allowed

Additional Benefit of using FMS with ATO Class Ruling –

  • The tax law must be applied as described in the ruling. You will be protected from paying any underpaid tax, penalty or interest if the ruling is incorrect.
BY MATTHEW PEARSON - TECH WRITER, TELEMATICS ADVOCATE AND FUEL TAX CREDIT CALCULATOR EXPERT

BY MATTHEW PEARSON - TECH WRITER, TELEMATICS ADVOCATE AND FUEL TAX CREDIT CALCULATOR EXPERT

LAST UPDATED 22 APRIL 2021

Pre Start Checklist

The pre start checklist provides a list of items operators must inspect, and items they should be aware of, during a daily inspection ...

Fleet Management Systems

Fleet management is the implementation of processes that are used to manage large fleets of vehicles. Fleet management systems are simply software systems ...

What are ATO Fuel Tax Credits?

ATO fuel tax credits are the excise tax that was paid on taxable fuel, then returned to the taxpayer in the form of tax credits when the fuel was used for specific business purposes.

GPS Trackers for Cars and Trucks

A GPS tracker for cars and trucks is a useful and inexpensive tool that can help protect your vehicle. But buying a GPS tracker for cars and trucks can be a daunting process.

ROI Calculator for Telematics and Fleet Management Systems

This calculator focuses on the ROI that results from better cost control, especially the costs associated with fuel and labour, and the tax rebates available from the Australian Fuel Tax Credit system.

What is the IAP/Intelligent Access Program?

The IAP (Intelligent Access Program) is a voluntary program that provides transport operators with enhanced access to Australia’s road network, in return for monitoring and compliance ...