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  • Fuel Schemes Stakeholder Group minutes 21 May 2015

    Meeting details

    Venue: ATO Office, 26 Narellan Street, Canberra

    Date: 21 May 2015

    Start: 10.00am Finish: 12.30pm

    Chair: Tom Wheeler

    Secretariat: Rowena Troth

    Contact Phone: (02) 4923 1444

    Attendees

    Tom Wheeler

    ATO

    Peter Holt

    ATO

    Anthony Barnard

    ATO

    Laurren Pamenter

    ATO

    Bryan Sharkey

    Shipping Australia

    Christopher Sant

    Deloitte

    Gavin Hughes

    Biofuels Association of Australia

    Lisa Smith

    KPMG

    Rob Howse

    NatRoad

    Sarah Harber

    Australian Trucking Association

    Darryl Daisley

    AMEC

    David Wilson

    EY

    Rowena Troth

    ATO

    Discussion Summary

    Disclaimer

    The Fuel Scheme Stakeholder Group agendas, minutes and related papers are not binding on the ATO, ACBPS or the other bodies referred to in these papers. While every effort is made to accurately record views expressed, the wording necessarily represents a summary of statements of general position only, and care should be taken in interpreting those statements. These papers reflect the position at the date of release (unless otherwise noted) and readers should note that the position on any issue may subsequently change.

    Agenda item 1 – Welcome

    Welcome and introductions.

    Outcome

    It was noted that the minutes of the meeting of 15 May 2014 were previously endorsed and have been published online. All action items were completed. No conflicts of interest were declared by members. Members were advised that references to out of session consultation with the FSSG will be recorded on the ATO website.

    Tom Wheeler, on behalf of the ATO, acknowledged members' contributions over the last 12 months in assisting with carbon tax repeal and promotion of related webinar to tax agents and businesses on fuel tax credits, communication of fuel tax rate changes from indexation of fuel in November and February, input into new redrafted content on the fuel schemes ATO's webpage, and consultation on fuel tax credit scheme.

    Agenda item 2 – Compliance focus areas for 2015–16

    Outcome

    Members noted the report by Andrew McIver regarding focus areas for 201516. The ATO will continue to focus on verifying high risk fuel tax credit claims, including detecting and addressing fraudulent claims. Common errors are the use of incorrect rates, calculation errors, and record keeping. Communications will focus on ensuring taxpayers are aware of rate changes (from fuel indexation during the year) and promoting tools to assist clients through those changes, including use of the fuel tax credit calculator.

    Discussion was held regarding the entitlement for fuel tax credits between a principal client and a contractor. Members raised this as a concern as some clients are not claiming at all. The ATO view is set out in FTR 2007/1  Fuel tax: the meaning of 'acquire', 'manufacture' and 'import' in the expression 'taxable fuel that you acquire or manufacture in, or import into, Australia to the extent that you do so for use in carrying out your enterprise' in the Fuel Tax Act 2006. Documentation between the parties acknowledging who will be claiming may assist in the case of an audit and ensuring that only one party is claiming. A fuel tax credit eligibility tool is available online.

    Tom Wheeler advised that the ATO has a plan for the year which sets out the proposed number of workshops, reviews, and audits to be conducted. The ATO are also considering preparation of a similar product to the Tax Gap for GST to be prepared in relation to fuel tax credits.

    There is a section of the ATO website that deals with building community confidence and the compliance focus areas, with brief mention of fuel tax credits.

    Action 21052015-2-1 – Tom Wheeler to arrange for ATO Communications to contact Gavin Hughes to provide various links for the new Biofuels Association website. Action completed. 

    Agenda item 3 – Reinventing the ATO

    Outcome

    Tom Wheeler provided an overview of the ATO's blueprint for reinvention. Members were advised of the work being carried out by the ATO with efforts to reduce red tape through deregulation and provide a contemporary service to make it easier for taxpayers to comply.

    Members discussed the ATO's plan of light touch for those clients whose dealings are low complexity and high transparency. Rather than identifying any product as high complexity, various other indicators will impact on any assessment, including the behaviour of the taxpayer and their reporting history. Tom reiterated that the focus of the ATO's work is to assist taxpayers to get it right the first time, including the use of more digital tools to make it easy to comply. In regards to this, the ATO are working with software developers.

    Laurren Pamenter provided members with an update of the Fuel Tax Credit Review. Common themes were found in responses from participants (including industry associations, taxpayers and tax agents), including irritants around apportionment and timing of indexation rate changes. Taxpayers told us that variability in business operations, systems and methods of acquiring fuel meant that it was unlikely that a single digital solution would be appropriate for all claimants. In addition, the complexity created by the need to apportion fuel use limits the development of digital solutions. Some participants expressed that taxpayers were not claiming fuel tax credits on eligible use of light vehicles, due to the cost in apportioning claims between eligible and non-eligible use.

    Laurren referred to the principles in the ATO blueprint and the work she is carrying out will feed into consideration on how the ATO can bring those principles to life in relation to fuel tax credits. One example is the redesign of our website material, to improve the content and accessibility, in the process reducing the content from some 900 pages to approximately 200.

    Peter Holt advised members of the formation of an ATO Safe Harbour Steering Committee. The Committee is made up of ATO senior officers and community members and would explore opportunities for new safe harbours. Once an area was identified, cost savings and revenue costs would be determined as well as possible options around that area which would then be submitted to the Steering Committee for consideration. The safe harbours would be a way of easing the administrative burden for taxpayers in calculating tax obligations, within the policy intent of the law. An Excise Working Group reports to that Committee.

    One suggestion from the group was in relation to clients who claim quarterly to have a blended safe harbour rate that can be used in relation to indexation rate changes.

    Peter Holt advised that the ATO has been reviewing recent rulings to identify key topics of confusion, and considering how we can use technology and online tools to offer faster advice and services on these. Members raised the issue of construction companies not being aware of the ability to claim fuel tax credits for use on non-gazetted roads.

    Action 21052015-3-1 – Members to provide feedback and suggestions on redesigned web information located at: https://www.ato.gov.au/Business/Excise-and-excise-equivalent-goods/ and https://www.ato.gov.au/Business/Fuel-schemes/. Due Date - 19 June 2015. 

    Action 21052015-3-2 – FSSG members to provide advice of any potential areas for consideration of safe harbours. Due Date – 19 June 2015. 

    Agenda item 4 – Federal Budget and Tax White Paper updates

    Outcome

    Members noted the extension of the GST Compliance Programme with States and Territories and the announcement by the Assistant Treasurer of statutory remedial powers for the Commissioner of Taxation. Likely parameters are that these can be used where there is an anomaly of the law but cannot be inconsistent with the policy intent and must be in favour of the taxpayer.

    Many of the Budget announcements will assist with improved digital initiatives service offerings.

    Members noted that the Better Tax Discussion Paper was released on 30 March with Chapter 9 relating to indirect taxes, including fuel tax credits. Submissions are due by 1 June.

    Members noted the Government's intention that the Biofuels legislation is passed before 30 June for a 1 July start date.

    Agenda item 5 - Industry / member updates

    Outcome

    Members noted the meeting of the Transport and Infrastructure Council on 22 May which would be setting the road user charge.

    Several members commented that issues around fuel tax credits and administration have greatly reduced over the past few years and clients are mainly satisfied with the processes.

    The potential impacts of the Biofuels legislation relating to the tax treatment of biodiesel and ethanol may mean a significant change for some members. Members were keen to receive advice from the ATO as soon as practicable if these measures are introduced.

    Agenda item 6 – Excise Regulations / Deregulation - bunker fuel

    Outcome

    Members noted that the Excise Regulations have been remade as of 1 April 2015. Language has been modernised and tables have been included with the refund circumstances and timing rules have been updated. Refunds for returned beer, tobacco and fuel were previously three separate items but are now one. Customs Regulations have been through a similar process and the fundamentals have not changed.

    Discussion was held regarding work being carried out by the ATO into fuel used for shipping. The ATO is looking at irritants around the paying and claiming side of the process and are mapping the current experience. Members also raised the issue of confusion around invoices which don't necessarily provide detail of excise inclusive or excise free, as with gaseous fuel.

    Agenda item 7 – Other business

    Outcome

    Statement of Intent – The new Statement of Intent was agreed by members.

    Digital Communications – Tom Wheeler acknowledged the input from members in relation to work being carried out on the ATO website.

    Tom encouraged members to ensure that mobile and email details are up to date, and encouraged use of the Business Portal. He noted that communications relating to fuel tax credits also include emails to this group as well as messages on Facebook and Twitter.

    There was no other business.

    The meeting concluded at 12.30pm.

      Last modified: 24 Jul 2015QC 46519