Fuel tax credits (FTCs) provide businesses with a credit for the fuel tax (excise or customs duty) that is included in the price of fuel used in machinery, plant, equipment and heavy vehicles. Businesses with a fuel spend of over $500,000 per annum that engage in construction services may qualify for FTC refund claims.

The FTC refund amount that a business is entitled to depends on what fuel is used and the activity that it is used for. There are currently FTC refund opportunities available for businesses in the construction industry that use fuel to power auxiliary equipment in vehicles like concrete trucks, mobile cranes, EWPs, prime movers, tip trucks, tow trucks, vacuum excavators and the like. Despite this, many businesses in the construction industry mistakenly apply outdated FTC rates or assign incorrect classifications of fuel used for different operations, resulting in lost FTCs.

Fortunately, the fuel tax legislation allows FTC refund claims to be made retrospectively for a period of four years to recover unreported FTCs. Further, if you notify the ATO via a ‘stop the clock’ letter, it’s possible to preserve your refund entitlement to four years from the date of the letter. This mechanism is only in operation until June 2016; therefore, we encourage you to act soon to maximise your potential refund entitlements.

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