In highly competitive markets it’s important to maximise efficiency and reduce operating costs. One way of doing this is by maximising your entitlement to fuel tax credits.
The Australian Tax Office (ATO) allows businesses to claim credits for fuel used within their business (including in machinery, plant, equipment and light and heavy vehicles). This sounds simple but, in practice, maximising claims is complex.
The amount that can be claimed depends on when your business purchased the fuel, what fuel was used, the type of vehicle, the tonnage of the vehicle and the activity the fuel was used for. Also, the fuel tax credit rates change frequently, further complicating the issue.
Most businesses are under claiming
Deloitte, a tax consulting and financial advisory firm, found that most Australian businesses were under claiming fuel tax credits. This is certainly understandable due to the challenges in fuel use record keeping and the calculations that need to be made.
The major areas of under-claim Deloitte found were in the transport sector; fuel used in both ‘light’ and ‘heavy’ vehicles.
For example, the ATO allows a fuel tax credit on light vehicle use only off public roads, but not on public roads themselves.
To assist businesses to claim all the fuel tax credits they are entitled to, Deloitte have developed proprietary software called Fuel Tax Radar. Through an agreement with Deloitte, Fleetminder has fully integrated the Fuel Tax Radar system in to the Fleetminder fleet tracking software.
Deloittes Fuel Tax Radar service
The Fuel Tax Radar comprises two key parts:
This involves using GPS, engine management and other data to identify the key opportunities based on the vehicle and machinery usage.
The usage is then matched to Deloitte’s database that includes a wide range of data relevant to fuel tax credits. It includes data on fuel consumption in major vehicle types; auxiliary equipment types and typical ‘off-road’ locations. It combines idle time data with journey time data and fuel consumption data to determine what is ‘fair and reasonable’ for your vehicle usage.
Simple to use
Since the usage data is collected and analysed automatically, Fuel Tax Radar then calculates the correct amount of off-road fuel tax credits your business can claim. You can then simply enter the accurate fuel tax credit figure on your Australian BAS.
Significant fuel tax savings
Since businesses using Fuel Tax Radar are no longer under claiming, the fuel tax savings have been significant.
One Australian transport company using Fuel Tax Radar data analytics, successfully claimed in excess of $100,000 in fuel tax credits. Retrospective savings and go forward benefits and efficiencies were realised by the client.
Vehicle and machinery tracking systems have produced increases in productivity and cost reductions for fleet operators. Now businesses can leverage that investment further and enjoy larger financial benefits through maximising fuel tax credits using Fuel Tax Radar from Deloitte through Fleetminder’s fleet tracking system.
Contact us for more information about the Deloitte’s Fuel Tax Radar service.