Under the Clean Energy laws that commenced on 1 July, fuel tax credit rates will be reduced by a carbon charge. John Baker, Director of AIT Specialists*, explains what how this will affect fleet managers and what can be done.
Many businesses are currently missing out on fuel tax credits due, in the main, to a misunderstanding of the Fuel Tax Act and its regulations. To add to this confusion, the Australian Taxation Office (ATO) promulgates rulings and determinations that are administrative and not legislative and are therefore not seen by business at large.
One of the major changes in recent times is a carbon charge. This charge is being applied to petrol and diesel at different rates. The carbon charge on petrol is 5.52 cents per litre, while it is 6.21 cents per litre for diesel. This charge will increase each year for the next three years. In effect, this will reduce the fuel tax credit rate for most usage.
The activities of agriculture, forestry and fishing will not be affected by the carbon charge.
Fuel tax credits are becoming so complicated that it has become a specialised field. Staff who presently prepare claims normally, will have this duty on top of many other duties. This is not normally considered to be their core business.
However, specialised help is available to help businesses and councils to identify fuel tax credits and correct any misconceptions.
Some of the services that are available include fuel tax identification and help with the preparation of claims. If it is discovered that fuel tax credits have been missed, a retrospective claim will be prepared.
A specialist firm may only charge a one-off fee of 25% of the value of the missed credits – if no retrospective credits are found there is no fee. Furthermore, the firm will then show the client how to include missed credits into future claims that they prepare themselves.
To show the kind of savings that are possible, local councils around the country have received more than $7.75 million from fuel tax credits, including more than $5 million in WA, more than $1 million in NSW and more than $500,000 in SA and Victoria.
John Baker and Ian Trestail from AIT Specialists will speak about fuel tax credits at the IPWEA Plant & Vehicle Management Workshops in September 2012. For more information, please visit http://www.ipwea.org.au/fleetmgtworkshop2012
* AIT Specialists is a firm that helps government and the private sector deal with specific indirect taxation, such as fuel tax credits. It is the preferred provider for local government in WA, SA and Tasmania.