Fuel tax credit rates are indexed twice a year, in February and August, in line with the consumer price index (CPI). Also these rates change regularly, so it’s important to check when you are preparing an activity statement for a client.
See this ATO webpage for the rates that apply from 4 February to 30 June 2019. (Past rates are also displayed there, just scroll down.)
If your client claims less than $10,000 in fuel tax credits each year, you can use any of the following simplified methods that best suit their needs.
Use the rate that applies at the end of the BAS period. When there is a change of rate during the business activity statement (BAS) period, you can calculate their fuel tax credit claim by using the rate that applies at the end of the period.
There is no need to split their fuel purchases during the period and use two different rates. Simply total their litres for the period and use the rate that is current on the last day of the BAS period to work out the claim.
To do this in the fuel tax credit calculator (see below), enter their total fuel purchases in the final rate period.
Work out their litres. To work out the quantity of fuel bought in a tax period, simply use the total cost of fuel they purchased in the BAS period, divided by the average price per litre for the BAS period.
Calculate their litres as follows: Litres = Total cost of fuel purchased ÷ Average price of fuel.
There is also a fuel tax credit calculator to help get the claim right. The calculator is also available on the “ATO app” for your smart device (download it from here).
In case you have a new small business client, who is also new to fuel tax credits, here is a video that explains the basics for small business owners.
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# [business fuel], [car tax], [driving], [fuel], [petrol], [small business], [vehicle tax]
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