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  • ATO action to reduce the gap

    The intention of fuel tax credits is to remove or reduce the cost of fuel tax on taxable fuels used in business operations.

    Differing rates of credits apply depending on the type and use of the fuel. Challenges for claimants exist due to complexities resulting from:

    • the frequency of rate changes
    • needing to apportion fuel type
    • needing to apportion fuel use for different business activities and types of vehicles
    • apportionment issues over whether fuel is used on or off public roads – this affects the rate at which claims can be made
    • an increase in the use and marketing of imperfect GPS or telematics technology to support claims.

    We seek to sustainably manage the fuel tax credits gap by:

    • actively managing the key compliance risks
    • developing clear guidance to help claimants and advisers.

    Our strategies are underpinned with the knowledge that supporting high levels of voluntary compliance is the best way to maintain a very small gap.

    To help small businesses including taxpayers who are underclaiming, we have produced guides, tools and safe harbours that make it easy to claim the right amounts.

    To help taxpayers who are overclaiming because of imperfect GSP or telematics technology, we continue to work with the product providers and advisers to improve the underlying data assumptions and methodologies.

    We also undertake targeted compliance activity to address aggressive claiming or deliberate non-compliance. We monitor outlays and compare this against other data.

    These strategies are highly effective in limiting inappropriate or excessive claiming.

    Online services and information

    We continue to support taxpayers to get it right the first time. Our free tools and information includes:

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      Last modified: 19 Oct 2020QC 57176