With tax time rapidly approaching, it’s time to get everything in order. The last thing you want is to skip a step that later puts you on the wrong side of an audit. You also don’t want to miss out on a potential rebate that puts some extra dollars in your pocket. To help, we spoke to Peter Perich, Director at PPM Tax and Legal, about one of the most commonly overlooked claims: fuel tax credits (FTC).
Check out our step-by-step infographic to understand how it works.
Do all businesses need to claim fuel tax credits?
While claiming is optional, all businesses that use fuel in their operations, other than light vehicles travelling on public roads and aircraft, are entitled to FTC. You’re probably eligible for FTC if your business manages any vehicles that:
- Are over 4.5t and travel on public roads;
- Travel, idle or work off public roads (regardless of size); or
- Operate auxiliary equipment (like refrigeration units or hydraulic machinery).
If you meet any of these criteria, you should consider claiming FTC, as it’s a useful way to recover some of your operating costs. To do this, it means working out fuel usage for different activities.
Wouldn’t most businesses already be doing this?
Yes, but many organisations claim conservatively as they are either not aware of the full extent of their entitlements, or don’t have the necessary resources. Often businesses don’t know that they can claim a portion of their fuel usage for travel off public roads at a higher rate, or if they do know, they’re unable to accurately quantify it. Where businesses do apportion their fuel usage between activities, they often rely on historic sample data, conservative estimates or complicated spreadsheets and many vastly underclaim because they’re worried about an audit.
So, what’s the alternative?
Every vehicle and asset can capture live data that makes it possible to streamline and automate the FTC claim process. Accurate high-definition GPS tracking data coupled with sophisticated dual-layer off-road mapping technology can tell you exactly how much fuel you can claim, without working it out on paper. This is what Teletrac Navman’s FTC Manager solution provides.
Is this just for trucks in the freight and transport industry?
Definitely not. Fuel tax credits apply to any business that uses fuel that meet the criteria above, except for aircraft or light vehicles travelling on public roads. If you work in any of the following industries, it’s likely you could also benefit from FTC rebates.
- Construction – You can claim FTC on any fuel used by vehicles travelling on job sites, if it’s classified as an off-road area. For example, if you’re completing maintenance on a closed section of road, that section may be considered off-road.
- Mining and gas - All fuel used on gas and oil fields can be claimed back in FTC at the highest rate, whether it’s used for machinery, heavy vehicles or lighter vehicles like utes.
- Local government – You can recover all fuel tax paid to power auxiliary equipment in vehicles, like street sweepers or garbage compactors.
- Agriculture – Fuel used on farm sites can be claimed – as well as any fuel used for travelling between sites off the main road network.
- Forestry – You can claim for fuel used in the construction or maintenance of roads within a forest as well as for activities like planting, tending, felling, transporting or milling trees.
If businesses haven’t been claiming FTC, can they get back what they’ve been missing out on?
Yes, we can help you claim a refund going back four years.
As well as using a sample of current data, we’ll collect and analyse additional information including fleet details, past FTC claim calculations, fuel acquisitions and information about the usual operations of the business. At the end we provide a formal letter of advice with instructions to claim your refund entitlements and providing full disclosure of the methods and calculations used in the process.
Of course, fleet size, customers and location might have changed drastically over four years so it’s important that we understand how similar the organisation’s operations are to those conducted in the past. If the business is likely to have a substantially higher or lower percentage of off-road travel, we will make necessary adjustments to ensure that our calculations are representative of the actual usage of fuel in the business.
How much can businesses expect to get back from a claim?
This really varies for each organisation, because it depends on all sorts of factors, like fleet size and composition, fuel usage, past claim history, and amount of off-road travel. We have completed roughly one hundred FTC Manager four-year retrospective claims over the last 10 months for customers with fleets ranging from a single vehicle to several hundred vehicles. On average, our customers have achieved refunds of several thousand dollars per vehicle and increased their ongoing monthly claims by more than five times what they are paying to use the system.
Does this take as much time as doing it manually?
Definitely not. Another cost to factor in is the amount of time and effort you’ll save. FTC Manager allows users to upload fuel transactions straight from the source and easily run automated reports which eliminate the need for complicated monthly spreadsheet calculations. This reduces staff admin time and provides greater security and peace of mind if an audit rolls around, because the reports come with the assurance of an ATO Class Ruling.
Why did PPM decide to partner with Teletrac Navman? What makes this solution different?
By combining Teletrac’s technology and GPS tracking capabilities with PPM’s expertise in fuel tax, we were able to create the most comprehensive solution on the market. FTC Manager is the only solution currently available on the market that uses second-by-second technology, offers both fourfour-year retrospective refund reviews and live ongoing claim reports, and offers a range of product levels to cater to businesses large and small. Teletrac provides the real-time location data that lets us do the complex calculations and ensure they’re accurate for every customer – giving them the rebate that they’re entitled to.
What if a business is already using an OBD device or calculating FTC manually? Isn’t that enough?
With GPS tracking technology that is hard-wired into your vehicle, you can automatically capture information to accurately quantify auxiliary equipment fuel usage which can be a large component of claims. You also have the assurance that the system cannot be disconnected by drivers. You don’t have these options with an OBD. This capability helps us get customers the absolute maximum rebate possible and stop leaving money on the table.
We’ve found that compared to manual accounting methods for making FTC claims, FTC Manager frequently achieves significantly higher returns, even for businesses that have already invested time in reviewing their claim process.