Check your oil…and your fuel tax credits!

Article by Scott Smith 

as featured in the Farm Weekly issue 14 July 2022

How often do you check the oil in your tractors, sprayers, utes and trucks? Would you go years without a service on the header? How long since you checked your fuel tax credit setups?

Fuel tax credits result in large refunds to our growers. Often a ‘set and forget’ model is adopted for the setup of claim percentages in bookkeeping software. Without reviewing you could be leaving dollars on the table!

Claim percentages should be reviewed at least annually, and particularly where there has been a significant change in the business such as:

• Increase in scale through purchase or lease

• Change in truck usage

If scale increases, and your no claim litres used stays similar which is often the case, your overall farm claim percentage should be increased.

For example, we reviewed the percentages for a client of ours after a farm expansion 12 months earlier. This resulted in their off-road farm diesel claim percentage increasing by 3%. While this was only a small change, this resulted in a $5,000 refund to them over that 12-month period, and effectively an annual refund of $5,000 per year going forward!

This is only one example, I wonder how many more claims are out there waiting to be discovered!

While we focus on diesel, unleaded should not be ignored. While this is a small amount used on farms in comparison to diesel, I have seen some unleaded not being claimed at all. 2,000L of unleaded used annually over a 5-year period would result in a fuel tax refund of approximately $4,000. An annual reconciliation of fuel tax credits claims will highlight if there has been an error or underclaim during the year.

An annual reconciliation of fuel tax credits claims will highlight if there has been an error or underclaim during the year. For example, an invoice entered after the BAS was lodged, or a delivery date changed in certain software. Ensure your accountant is reviewing these and doing an annual check, particularly with some quarters this year effectively having three claim rates! A missed invoice can result in thousands of dollars not being claimed!

We have developed calculators to assist our clients to work out what their claim percentages should be. If you need assistance to help calculate your fuel tax credit entitlements we can assist, so please give us a call.

To discuss this article further, we encourage you to contact Scott Smith on (08) 9475 0596 or your Byfields accountant.

Disclaimer: This content provides general information only, current at the time of production. Any advice in it has been prepared without taking into account your personal circumstances. You should seek professional advice.

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