The Australian Taxation Office (ATO) has identified that taxpayers may have overclaimed fuel tax credits during the temporary rate reduction period.

Between 30 March 2022 to 28 September 2022, fuel tax credits rates were halved as part of a Federal Budget measure. Businesses therefore were paying less fuel tax and must only claim fuel tax credits up to the ATO published rates.

While the ATO has identified several different errors when undertaking fuel tax credit reviews, a common one is businesses making claims for fuel that was used in a heavy vehicle for travelling on public roads during the temporary rate reduction period where the fuel tax credit rate was reduced to nil.

What should you do?

If you are a business that has claimed fuel tax credits – particularly during the temporary rate reduction period – you should check your Business Activity Statement (BAS) and make sure you have applied the correct fuel tax credit rate on the day the fuel was acquired.

Where you identify the use of the wrong rate in a previous BAS, this may be corrected in the next BAS where the error is within the time and value limits applicable to your business. It's important to do this to avoid penalties and general interest charges.

If you have any questions regarding the calculation of fuel tax credits and how it impacts your business, please reach out to our fuel tax specialists today.

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