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  • If you are subject to compliance activity

    A compliance activity is an examination of your fuel tax credit affairs undertaken by us and includes reviews, audits, verification checks, record-keeping reviews/audits and similar activities.

    If you receive advice from us by phone or in writing about our intention to conduct a compliance activity, you cannot correct an error in your current BAS:

    • that is the subject matter of that compliance activity
    • arising in a reporting period that is subject to the compliance activity.

    If you find errors, it is in your best interest to voluntarily disclose them. If you tell us about your error, it will be taken into account when we consider penalties.

    A compliance activity is completed when you receive a notice of assessment or notice of amended assessment, or when we tell you that the examination has been finalised.

    Example 13: fuel tax credit error cannot be corrected due to related compliance activity

    In June 2021, we notify Grote Construction that we are conducting a review of its past fuel tax credit claims for the company’s on-road activities. In preparation, Grote Construction undertake its own review of both its on-road and off-road activities.

    Grote Construction discover that it made a transposition error when calculating the amount of fuel acquired for its on-road activities. As this error relates to the matter we are reviewing, Grote Construction cannot correct the error in their current BAS. The error must be corrected in the original BAS where the error was made. As compliance review activity is being undertaken, it is in their best interest to voluntarily disclose the error.

    End of example

     

    Example 14: fuel tax credit error can be corrected despite compliance activity

    In March 2021, we notify Broome Agricultural (turnover less than $10 million) that we are conducting a general review of its fuel tax credit affairs for each of the monthly reporting periods ending 31 January 2020 to 31 January 2021. Broome Agricultural also conduct its own review and discover an error made in working out its fuel tax credit entitlement for the reporting period ending 30 November 2019.

    As the error was made in an earlier reporting period and was not subject to compliance activity (and was not related to a matter subject to review), Broome Agricultural can correct the error in their current BAS. This is as long as they meet the other conditions for correcting the error specified in this guide.

    End of example

    Recklessness or intentional disregard of the law

    You cannot correct a debit error if the error is due to recklessness or intentional disregard of the fuel tax law:

    • Recklessness – is behaviour that falls significantly short of the standard of care expected of a reasonable person in the same circumstances. It is gross carelessness.
    • Intentional disregard of the law – is something more than reckless disregard of, or indifference to, a tax law. The intention is a critical element. That is, a person must have understood the effect of the law and how it operates and makes a deliberate choice to ignore the law.

    Example 15: intentional disregard of the law

    Bracely Co is facing a cash-flow problem and deliberately over claims its fuel tax credit amount by $10,000 when lodging its monthly BAS for November 2021.

    As the debit error (over claiming fuel tax credits) results from Bracely Co intentionally disregarding fuel tax credit law, it cannot correct the error on its current BAS. Bracely Co must correct the debit error on the original November 2021 BAS. Penalties and general interest charges (GIC) may also apply.

    End of example
      Last modified: 19 Jan 2023QC 18882