If you are doing a business which uses fuel, you will have the possibility of claiming credits for the fuel tax which is included in the fuel price. These tips will help you to find out your eligibility and how to proceed the claim process.

Checking your eligibility for fuel tax credits

Not all are eligible for fuel tax credits. Taxable fuel includes gaseous fuels, liquid fuels and fuel blends which you purchase, import or even manufacture. If your business uses taxable fuel for business activities in machinery, equipment, plants, heavy vehicles which are over 4.5 tonnes and light vehicles which travel on private roads, you can claim credits for the fuel tax which is included in the fuel price.

Ensure you are registered

If you need to claim FTC rates, you need to be first registered for fuel tax credits and goods and services tax (GST) which applies to most goods and services which are sold or consumed in Australia.

Checking the time limit for making a claim

In the general process, you need to claim credits within four years. These four years generally start from the day after you lodge your business activity statement (BAS) for that fuel that you got during the tax period.

Reviewing the amount of fuel, you can claim

The type of fuel that you use and the business activity for which you use it decides the amount of fuel tax credit which you can claim. Correctly identifying how the fuel is used affects the sum of fuel tax credits that can be claimed. Hence when proceeding to claim consider the three factors; the kind of fuel used, when the fuel was taken and the type of activity for which it was used.

Calculating fuel tax credits

Fuel tax credits are claimed on the business activity statement. Before they are claimed, the fuel tax credits need to be calculated. You can either use a fuel tax credit calculator for this purpose or the Australian Taxation Office (ATO) if you are a small business owner.

 In line with the upward movement of the consumer price index, fuel tax credit rates change regularly and are adjusted twice a year. Therefore, it’s best to check out the rates each time the business activity statement is done as there is a possibility to have over one rate in a certain period.

Claiming and recording fuel tax credits

Fuel tax credits are claimed based on the business activity statement and can be done at the time the fuel is acquired. Recording the fuel tax credits and including them in the tax return at the Assessable Government Industry payments is another fact to be considered as fuel tax credits are also a type of business income.

It is important to calculate and claim the fuel tax credits correctly so as to avoid over-claiming or even otherwise. The above tips will help you avoid common errors and claim your fuel tax entitlement correctly.