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Fuel tax credits – correcting common mistakes
Have you checked your fuel tax credits?
The Australian Taxation Office (ATO) is encouraging businesses who claimed fuel tax credits during the temporary rate reduction to check they haven’t overclaimed.
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Businesses who didn’t use the ATO’s fuel tax credit calculator may have been using incorrect rates and claiming the wrong amount for fuel acquired during the temporary rate reduction between 30 March and 28 September 2022.
Businesses who have made errors will need to decrease their fuel tax credits claim in their current business activity statement (BAS) at label 7C (fuel tax credit overclaim) to avoid penalties and general interest charges.
A common mistake is claiming for fuel that was only used in a heavy vehicle for travelling on public roads. The fuel tax credit rate reduced to nil for this activity during the rate reduction.
To make accurate claims and get fuel tax credits right on your BAS:
• use the ATO’s fuel tax credit calculator
• review and fix debit errors remember records you need to keep
• consider debit error time limits and debit error value limits
• contact a tax or BAS agent for help.
Fuel tax credit error example
Mitchell acquired 10,000 litres of diesel fuel on 1 June 2022 for use in his heavy vehicle while travelling on public roads. He claimed $1,780 (10,000 × 0.178 cents per litre) on his June quarterly BAS. Mitchell claimed the amount by mistake using the fuel tax credit rate based on the February 2022 rate.
From 30 March to 28 September 2022, businesses that acquired fuel for use in heavy vehicles for travelling on public roads couldn’t claim fuel tax credits. This is because the road user charge was more than the excise duty paid, which reduced the fuel tax credit rate to nil.
In February 2023, Mitchell uses the fuel tax credit calculator to check this calculation. The calculator showed he should have claimed $0 (10,000 × 0.00 cents per litre) on his June 2022 quarterly BAS.
To correct the overclaim, Mitchell makes a correction on his March 2023 quarterly BAS to decrease his fuel tax credit amount by $1,780. He does this by including $1,780 at label 7C (fuel tax credit overclaim).
