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  • ATO action to reduce the gap

    Although for 2017–18 the fuel tax credit gap was negative, there was a combination of over claims and under claims. So we need to continue our focus on helping taxpayers claim the correct amount.

    A number of compliance risks drive the gap:

    • Approximately 87% of claimants are small businesses that may not have natural systems, such as software or specific resources, to manage claims.
    • The introduction of bi-annual indexation in November 2014 increased the frequency of rate changes.
    • In addition, some fuel tax credit rates change because of annual changes to the road user charge. These multiple changes throughout the year can result in some claimants using incorrect rates.

    Other challenges for taxpayers arise from:

    • complications associated with needing to apportion fuel type
    • complications associated with needing to apportion fuel use for different business activities and types of vehicles
    • apportionment issues over whether fuel is used on public roads or off public roads – this affects the rate at which claims can be made
    • an increase in the use of imperfect technology to support claims. We sometimes have concerns about assumptions which are used to calculate these claims. We continue to work with clients and their advisors to clarify entitlements.

    We seek to sustainably manage the fuel tax credits gap by actively managing its key compliance risks. Our strategies are underpinned with the knowledge that supporting high levels of voluntary compliance is the best way to maintain a very small gap.

    Opportunistic or aggressive claiming behaviour does occur, but is generally limited.

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

    These strategies are effective in limiting inappropriate or excessive claiming.

    Online services and information

    We continue to support clients to get it right the first time. Our online services and information for taxpayers includes:

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      Last modified: 17 Oct 2019QC 57176