Fuel tax credits for heavy vehicles just got a little easier to understand

The ATO says it has listened to complaints about providing clarity in regard to fuel tax credits, and so has developed and issued new information (and updated a ruling) to make it easier to work out fuel tax credit entitlements for your clients. Fuel tax credits heavy vehicles just got easier to understand Fuel tax credits for heavy vehicles just got a little easier to understand

Updated guidance

Part of its efforts are in the form of updated guidance documents, which can help determine your clients’ fuel tax credit entitlements for fuel used in heavy vehicles.

A new practical compliance guideline (PCG 2016/11) details the methods you can use to apportion fuel used in heavy vehicles to power auxiliary equipment. There are percentages you can apply so you won’t need to do complex calculations or sample testing when you work out your clients’ claims.And a new fuel tax determination (FTD 2016/1) explains that the fuel tax credit rate is reduced by the road user charge for heavy vehicles idling on a public road, or powering air conditioning for the main cabin when travelling on a public road.

Public roads

The ATO has also clarified the meaning of a “public road” in fuel tax ruling FTR 2008/1 (paragraphs 121-127). A public road is a road available for use by members of the public.

It says tax practitioners should use the:

“heavy vehicle for travelling on public roads” rate for travel on toll roads, bus lanes and busways, and“all other business uses” rate for travel on forestry, mining access and agricultural property roads, as these are examples of roads not considered public.

If tax practitioners have not used the correct rate when calculating fuel tax credits for their clients, the ATO says that an adjustment will need to be made to their activity statement.

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