Fuel Management Systems and Tax Credits

January 25, 2024

Fuel Tax Credits (FTC) serve as a valuable resource for commercial transport operators, allowing them to claim credits against the cost of fuel consumed for business-related activities on non-public roads. In the ever-changing landscape of fuel tax regulations, staying ahead requires a sophisticated approach.

Understanding Fuel Tax Credits: A Vital Business Entitlement

Fuel Tax Credits are a crucial entitlement for commercial transport operators, providing a means to offset fuel costs and enhance cash flow. These credits are claimed in the business activity statement (BAS), like GST credits, and depend on factors such as when the fuel is acquired, the type of fuel used, and the activity it is used for. The rates for fuel tax credits are subject to regular changes, requiring businesses to stay informed and use the applicable rate for the date of fuel acquisition.

While FTC can be a significant financial advantage, certain restrictions apply. Businesses cannot claim credits for fuel used in light vehicles of 4.5 tonnes GVM or less on public roads, for private purposes, or for acquired fuel that remains unused.

Calculating Fuel Tax Credits: Navigating Complexity with Precision

The calculation of Fuel Tax Credits involves intricate considerations and methods. The Fuel Tax Act 2006 provides flexibility in choosing fair and reasonable methods for apportioning taxable fuel. Common methods include the basic method, determining the quantity of taxable fuel for each business activity, and the percentage use method, applying a reliable percentage of taxable fuel used for each activity over multiple tax periods.

However, the complexity of accurately determining public and non-public road use poses challenges. The lack of a definitive list of roads and accepted methodologies from the Australian Taxation Office (ATO) often leads to manual calculations that consume extensive time and may result in conservative FTC amounts.

How do you ensure you receive the maximum rebate on Fuel Tax Credits?

Calculating Fuel Tax Credits: Navigating Complexity with Precision

  1. With a robust Fuel Management System in place, businesses can bid farewell to the uncertainties associated with FTC claims. Real-time data and precise calculations ensure accurate and well-supported claims, eliminating guesswork and minimising the risk of under-claims.
  2. Leveraging the capabilities of a Fuel Management System translates to optimised FTC rebates. The system’s algorithms and digital calculations work tirelessly to identify and capture every eligible credit, ensuring businesses receive the highest rebate possible.
  3. The retrospective capabilities of Fuel Management Systems are a game-changer for businesses with under-claimed FTC rebates. By utilising current usage data and sophisticated calculations, the system can identify and recover previously overlooked credits, providing a financial boost to the business.
  4. Time is a valuable resource, and a Fuel Management System is designed to save businesses significant administrative time. Automation of calculations, real-time tracking, and streamlined processes mean less manual effort in managing FTC claims, allowing teams to focus on more strategic aspects of fleet management.

Revolutionising Fuel Tax Credit Calculation: The Power of Automation

Banlaw’s Fuel Tax Credit Calculator, a revolutionary solution that allows you calculate a possible tax fuel credit you maybe entitled too. Use our calculator here.

Unleashing the Full Potential of Your Fleet Data

In the dynamic landscape of fuel management, embracing automation and cutting-edge technology is not just an option; it’s a strategic imperative. Using Tax Credit Calculator and a Fuel Management System, empowers businesses to unlock the full potential of their fleet data, providing real-time insights, proactive maintenance planning, and, most importantly, maximising their fuel tax credits. Ready to revolutionise your approach to FTC? Get in touch with us and speak to an expert who can guide you towards a more efficient and lucrative fuel management strategy.