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  • Tips to avoid common errors

    It is important you calculate and claim your fuel tax credits correctly and that you avoid over-claiming.

    We know most businesses are trying to do the right thing – but not everyone is claiming their fuel tax entitlements correctly. To help, we’ve identified the most common errors and how you can avoid them to get your claims right.

    You should ensure the accuracy of your claims before you lodge your BAS. If you have made an error on your BAS you are able to correct or adjust it. There are some conditions when correcting errors.

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    Check the activity

    You need to correctly identify how your fuel is used as this affects the amount of fuel tax credits you can claim.

    Common errors include:

    • not apportioning fuel use correctly between on and off-road
    • claiming for fuel used in sleeper cabins when the heavy vehicle is not used on a long haul trip or when fuel has not been used to power the air conditioner during the sleeping break on that trip
    • claiming for ineligible activities such as fuel used in light vehicles used for travelling on public roads.

    You can avoid these errors by using our eligibility tool or the simplified apportionment method for calculation, to check your activity and calculate the correct claim.

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    Check the rate

    Fuel tax credit rates change regularly. Rates also differ depending on the activity the fuel is used for. It's important you use the right rate so you claim the full amount you're entitled to.

    Common errors we see include:

    • using the wrong rate for the activity being claimed
    • claiming using an old rate.

    Make sure you are using our fuel tax credit calculator to work out your claim. The calculator is updated with all the rate changes. You should also check the rates before you lodge your business activity statement (BAS).

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    Use simplified methods correctly

    Simplified methods can make calculating your fuel tax credits easier.

    A common error includes using the simplified apportionment method for calculating fuel tax credits and making a separate calculation.

    When using this method to calculate your fuel tax credits don’t do a separate calculation:

    • for fuel used while the heavy vehicle is off public roads (such as for idling or propelling the vehicle, and use of auxiliary equipment)
    • to claim the apportionment for fuel used to power auxiliary equipment or for heavy vehicles used mainly off public roads.

    There are also other types of simplified methods to help you claim fuel tax credits.

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    Use software correctly

    You can use software to help you monitor and calculate your fuel tax credits – however you must ensure the accuracy of the claims.

    Common mistakes when using software, including GPS trackers, include:

    • not cross-checking the accuracy of the GPS route or distances travelled, including the classification of private or public roads
    • the software detecting the vehicle as idling, when it is not (for example, the vehicle ignition is switched on and using functions such as the radio and fan, but the engine is not running)
    • producing inaccurate records of fuel dispensed to vehicles when compared with actual fuel acquired and used in the vehicle
    • not checking to see if the GPS software is producing a realistic off-road fuel use percentage.

    Even when using software such as a GPS tracker, you need to ensure the time and location of the GPS record is correct. You can select a sample of the GPS data and use other records you have, including delivery logs or a National Work Diary, to help confirm the vehicle's location and the time it was at that location.

    We do not supply or endorse any GPS software. If the software is not tracking usage correctly you should speak with the software provider.

    Keep records to support your claim

    When claiming fuel tax credits, we see people keeping incomplete or inaccurate records. In order to claim, you need to keep accurate and complete records of your fuel purchases and how the fuel is used in your business.

    When checking records ensure:

    • you have evidence to support how you used the fuel
    • you confirm both how much fuel was purchased and how much fuel was used
    • any GPS reports or records reflect your business operations and the date has been used correctly.

    You should also include records which show fuel consumption testing has been carried out, and the results of that testing.

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    Check your calculations

    Common calculation errors include:

    • transposition or clerical mistakes which affect the amount you claim
    • using the cost of the fuel, instead of the quantity of fuel multiplied by the relevant rate in your calculations.

    Work out your fuel tax credits using this formula:

    Quantity of eligible fuel × Correct fuel tax credit rate = Fuel tax credits

    Write this amount (in whole dollars) at label 7D on your BAS. Keep records of your calculations.

    You should also check your claim calculations with the fuel purchased to ensure you have not over-claimed. For example, when you calculate your credits the results show more fuel used than has been purchased.

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    Last modified: 10 Jun 2020QC 44522