With the rise in petrol prices making everyone’s eyes turn to the Federal government for some relief, businesses may be feeling the pinch of the additional expense in running their vehicles.

Whether you’re a business owner or simply an individual that uses their car for work-related purposes, fuel is a taxation topic that you might want to revisit with your tax agent.

Fuel Tax Credits (Businesses)

As a business owner, you may be eligible to claim fuel tax credits. This provides businesses with a credit for the fuel tax (excise or customs duty) that’s included in the price of fuel used in

• machinery
• plant
• equipment
• heavy vehicles
• light vehicles travelling off public roads or on private roads.

This amount depends on when the fuel is acquired, what fuel is used and the activity you use it in. The rate of tax credits may change regularly, so it’s important to check the rates each time you do your business activity statement (BAS).

To make a claim for fuel tax credits you must be registered for:

• GST when you acquired the fuel
• Fuel tax credits when you lodge the claim.

These fuel tax credits can be claimed for eligible fuel that was acquired, manufactured/imported and used in your business.

Some fuels and activities may be ineligible to claim fuel tax credits on. These include

• fuels used in light vehicles of 4.5 tonnes GVM or less, travelling on public roads (for example, a car, small van, taxi or ride-sourcing services)
• fuel used for private purposes – including light vehicles (for example, utes)
• transport gaseous fuels used in a heavy vehicle which has a GVM greater than 4.5 tonnes for travelling on public roads
• the fuel you acquired but didn’t use because it was lost, stolen or otherwise disposed of
• fuel that had no excise or customs duty paid on it. For example, used oil that has only been subject to filtering and de-watering and used as fuel oil in burner applications is not eligible for fuel tax credits.

Consulting with a tax professional about the fuel tax credit may be an avenue to pursue if you are a business owner concerned about the increase in expenditure around fuel.

Claiming Fuel As A Work-Related Deduction (Individuals)

In general, there are three rules to how you need to claim fuel as a work-related deduction:

1. You must have spent the money yourself (ie. you weren’t reimbursed by your work).
2. The fuel must directly relate to you earning your income.
3. And you have to keep records to prove the expense.

The second point is not just for those whose primary income is derived from driving, such as couriers and rideshare drivers. Any work-related trip where fuel was used can be claimed EXCEPT your commute. This is technically classified as private, and cannot be claimed.

There are limited circumstances where it may be okay to claim such travel as a deduction. These include:

• Travelling between one workplace and another (ie. if you have two jobs or are an itinerant worker).
• Driving from home directly to an alternate workplace.
• When you have to carry bulky tools or equipment that are essential to your job.