All businesses in Australia can claim fuel tax credits for fuel used in their business. It includes the price of all fuel used in their business activities. Taxable fuel for a business is the fuel that’s purchased, manufactured, or imported.
Among the taxable fuels are liquid fuels, fuel blends, and gaseous fuels.
- Liquid fuels are diesel, petrol, and fuels such as kerosene. Full lists are found online.
- Two standard blends of fuel are petrol and diesel blends.
- Gaseous fuels are liquefied natural gas, liquefied petroleum gas, and compressed natural gas.
Your business can claim activities in plant, equipment, machinery, vehicles that are over 4.5 tonnes, and vehicles that are light enough to travel on private roads but not on public roads.
Auxiliary equipment that requires fuel can also be included. This is equipment powered by their own motors using fuel from the main fuel tank of a heavy vehicle or a separate fuel tank.
Registering for goods and services tax or GST
To put in a claim, you must be registered for both FTC and GST. GST is a 10% tax on most services, products, and other items that are used or sold in Australia. If your business is GST registered, your customers have to pay your business this money, and you pay it to the tax services each tax period.
- Your business has a GST rotation of over $75,000+
- $150,000 or more for a non-profit organisation
- Businesses offering taxi or limousine services
- Claiming FTC no matter what the actual turnover
FTC must be claimed within four years after you have lodged your BAS for the tax period in which your business got the fuel.
Amount of fuel
The amount of fuel that your business can claim depends on the kind of fuel you use and how you use it. So when you are ready to claim FTC, you must list when you got the fuel, the kind of fuel used, and how you use the fuel in your business.
Calculating and claiming FTC
You can find online an FTC calculator you can use, or small business owners can use the ATO app. They can help guide you through the proper steps. Be sure to check the latest rates and keep in mind that it’s possible to have more than one rate per period. Twice a year, FTC rates are adjusted according to the CPI. You can also find information on simplified FTC if you want to put in a claim and spend on fuel below $10,000 per year. After calculations, you claim your FTC on your BAS and remember that they are also business income.
Claiming less than $10,000 per year
If your business wants to claim FTC for less than $10,000 per year, then you can use the following records:
Contractor Statement where the amount of fuel used for business is deducted from the amount that was paid for services.
Financial institution statements showing only the amount paid.
Point-of-sale-docket, where the amount of fuel dispensed, is not itemised or the amount is illegible.
Fuel supplier statement or invoice that only shows the dollar amount.
You can find information online for any other inquiries or concerns you might have when you want to claim your FTC.