From 1 July 2006 some businesses, for example people in the transport industry who use a vehicle that has a Gross Vehicle Mass greater than 4.5 tonne may be able to claim a Fuel Tax Credit on their Business Activity Statement in the same way as you claim GST credits.
The fuel tax credit is calculated by multiplying the number of eligible litres by the relevant fuel tax credit rate, which is determined by the type of fuel and the type of eligible activity it is used in.
To support your claim for fuel tax credit, you need to keep details of any transaction, acts, estimates or calculations involving the fuel.
The records you need to keep per the ATO information leaflet ‘How to cut your business fuel costs’ include:
1. Records of fuel acquired.
- In Cashflow Manager there is the facility to record ‘Quantities’. Whenever you purchase eligible fuel record the number of litres as well as the amount. To record the quantity, press the F12 key on your keyboard when you are in the cell in which you are allocating the payment.
2. Use of fuel in eligible and ineligible (e.g. private use) activities.
- Keep a logbook that shows your business or private use. (If the majority of your fuel is used for business then use the logbook to record private use.)
3. The basis and method for calculating the quantity of eligible fuel and your fuel tax credit.
- Use the number of litres and the proportion of business expenditure to calculate your claim.
4. Any loss, sale or disposal of fuel.
- Once again you could use the Quantity field in Cashflow Manager to record this information.
You will need to manually enter the amount of Fuel Tax Credit claimed in your Business Activity Statement.
Record your Fuel Tax Credit Entitlement together with any adjustments that increase your entitlement at Label 7D.
Label 7C is for any early payments you claimed under the special transition claiming arrangements that are attributed to the tax period together with any adjustments that decrease your fuel tax credit entitlement.
Stage 2 is recording the transaction when you pay or receive a refund from your BAS as this forms part of your taxable income, but is not subject to the GST.
Let’s look at an example.
Tim has a furniture delivery business and owns a 5 tonne diesel truck. For the period of 1 July 2006 to 30 September 2006 he calculates that his fuel tax credit is $600. As well as that he has $3000 GST Payable making his total payment for his BAS as $2400 (being $3000 less the fuel tax credit of $600).
As the Fuel Tax Credit is considered to be taxable income we recommend that you identify it separately in your records and there are several ways to do this.
Option 1 is to set up a non-GST column in your Payments section called ‘Fuel Tax Credits’. When Tim records his BAS payment in the Payment section of Cashflow Manager he records $2400 in the Total Bank Payments column and then records $3000 in either the Sundry Non-GST column or a special column setup for BAS payments, and $-600 in the Fuel Tax Credits column.
The Fuel Tax Credits will then show in your reports as a negative payment but it will be obvious to your accountant that this needs to be included with your assessable income in your tax return.
Option 2 would be to create a new column in the Receipts section for ‘Fuel Tax Credit Refund’. This will be given the non-GST type and it will be a Profit and Loss account.
In the Payments section, allocate the $2400 to the Sundry Non-GST column or a special column setup for BAS payments.
In the Receipts section, record $0 as the Total Amount. Then record $600 in the Fuel Tax Credit Refund column and $-600 in the Sundry non-GST column. The amount to record in the Bank Deposits or Receipts Not Banked account will be $0.
So now the Fuel Tax Credit Refund will be included in your Profit and Loss Report as income.
Example 2: Tim has a furniture delivery business and owns a 5 tonne diesel truck. For the period of 1 July 2006 to 30 September 2006 he calculates that his fuel tax credit is $600. As well as that he has a $3000 GST Refund making his total refund for his BAS as $3600 (being $3000 plus the fuel tax credit of $600).
In this example you would have a column called ‘Fuel Tax Credit Refund’ in your Receipts section. (This would be non-GST and Profit & Loss).
In the Receipts section, record the total refund received in the Total Receipts column. Then record $600 in the ‘Fuel Tax Credit Refund’ column and $3000 in the Sundry Non-GST Receipts or GST Refunds column.