Fuel Tax Credits (FTC) are a valuable benefit for eligible businesses, offering tax offsets on fuel used in various business activities. If your business relies on fuel to power machinery, vehicles, or equipment, you may be eligible to claim credits from the Australian Taxation Office (ATO). Let’s explore the eligible fuels, business activities, and what you need to know to take advantage of these credits.

What Are Fuel Tax Credits?

Fuel Tax Credits provide businesses with a reimbursement for the fuel tax (excise or customs duty) included in the cost of fuel used for business purposes. These credits reduce the fuel cost burden, helping businesses to manage expenses more effectively, and apply to a wide range of industries, including agriculture, construction, manufacturing, mining, and forestry.

Eligible Fuels

The ATO defines specific fuel types eligible for tax credits. Commonly eligible fuels include:

• Diesel and Petrol: Widely used across industries, especially in heavy vehicles, farm machinery, and construction equipment.
• Biodiesel and other Blended Fuels: These fuels, often blended with diesel, can also qualify for credits.
• LPG, LNG, and CNG: These gases are eligible when used in heavy vehicles for specific business purposes.
• Kerosene, Heating Oil, and Certain Solvents: Businesses in manufacturing, mining, or other energy-intensive sectors often use these fuels.

Make sure you’re only claiming credits on fuel types approved by the ATO for your specific usage. Not all fuels and business applications qualify, so check with a tax professional if you’re uncertain.

Eligible Business Activities

Fuel Tax Credits are generally available when fuel is used for the following purposes:

1. On-Road Activities: Heavy vehicles with a Gross Vehicle Mass (GVM) of more than 4.5 tonnes that are used for business purposes on public roads may be eligible. These could include trucks, buses, and other commercial vehicles.

2. Off-Road Activities: Fuel used to operate machinery and vehicles off public roads can qualify for higher credit rates. Industries such as agriculture, mining, forestry, and construction commonly use fuel off-road in equipment like excavators, harvesters, and bulldozers.

3. Stationary Equipment: Fuel used in stationary equipment like generators, irrigation pumps, or compressors also qualifies. For example, a construction company running a diesel generator on a job site would be eligible to claim credits for the fuel used.

4. Marine and Rail Activities: Marine vessels used in fishing, transportation, and tourism can also qualify for FTC, as can certain fuels for business-related rail transport operations.

Important Considerations

1. GST Registration Status: You are not eligible to claim FTC unless you are registered for GST, or required to be registered for GST, at the time you acquire, manufacture or import taxable fuels.

2. Fuel Usage Documentation: To maximise your claims and ensure compliance, keep accurate records of your fuel purchases, usage, and the business purpose. This documentation is critical to maintain in case of an review of your FTC claims by the ATO.

3. Eligible Vehicles and Equipment: Double-check the eligibility criteria, as some vehicles used on public roads might not qualify if they don’t meet the heavy vehicle GVM requirements. Fuel used in light vehicles (under 4.5 tonnes GVM) is typically excluded if used on public roads.

4. FTC Claims Cycle: You can claim credits monthly, quarterly, or annually, based on your Business Activity Statement (BAS) reporting schedule. Ensure your claims align with your reporting cycle to avoid incorrect claims or missing out on eligible FTC.

Start Saving with Fuel Tax Credits

Fuel Tax Credits can significantly reduce operating costs, particularly for fuel-intensive industries. Whether you’re a farmer, construction company, transport business, or manufacturer, and if you are currently not claiming FTC, check if you’re eligible and start claiming these valuable credits.

Fuel tax credits could be the financial relief your business needs, don't leave money on the table! For more detailed information tailored to your business circumstances, don’t hesitate to reach out to WSC Group and discuss with us how to maximise your FTC benefits whilst staying compliant.