Farm Weekly | Take Off Your Roof Rack

Article by Lea Williams Byfields Director

The government has just spent $20million to educate us all on how to save fuel, which is an interesting way to support business’ that rely on fuel to operate. With ongoing concerns regarding immediate supply to get through seeding and beyond, we are seeing large purchases by our clients at inflated prices. 

With fuel purchases comes Fuel Tax Credit (FTC) claims. FTC claims are made every quarter in your BAS using the fuel excise rates charged which can change every 6 months. Lodging FTC claims is an important part of cashflow management especially when fuel usage and cost is high. 

The government has recently cut the excise from 52.60 cents per litre to 20.60 cents per litre for 3 months starting on 1 April 2026. They have also cut the Road User Charge from 32.4 cents per litre to zero. Given these changes, record keeping will be important to ensure you have the correct purchase date and usage period to work out your claim. 

Importantly, the FTC rate is based on when the fuel is acquired, not when it used. 

Therefore: 

• Fuel bought before 1 April 2026 = old rates  

• Fuel bought from 1 April 2026 onward = new reduced rates  

This means your April to June BAS will likely require a split calculation, due to March fuel invoices paid in April. 

Example – Split required 

• Bulk fuel delivered:  

• 20 March 2026 (unclaimed until June BAS)  

• 10 May 2026  

BAS must: 

• Apply 52.6 cpl to March fuel  

• Apply 20.6 cpl to May fuel 

In the past year, tax office FTC audits have increased, especially for clients who restructured their business.   

Recent audits have highlighted several common issues, including: 

• Failing to correctly apportion fuel between on-road and off-road use,  

• Claiming fuel used in light vehicles travelling on public roads,  

• Using outdated rates, and  

• Inadequate record-keeping to support claims.  

Given the seasonal and varied nature of a farming season, accurately tracking fuel use can be challenging. However, the ATO expects you to maintain clear and reasonable records, whether through logbooks, equipment tracking, or other substantiation methods.  

The ATO audit activity has required clients to supply: 

• A list of all vehicles using fuel, 

• Individual vehicle fuel usage rates per hour, 

• A logbook of hours per vehicle of use in the quarter including on-road and off-road, and 

• Fuel receipts showing litres and dates purchased. 

These calculations should be adjusted each quarter depending on fuel use as this will vary at different times of the year. If you have apportioned your fuel use incorrectly when making a claim in a previous quarter, you must make an adjustment when you discover the mistake. 

So, once you’ve removed your roof rack, please ensure you are keeping adequate records to support your FTC claim. If you would like to know more contact us today.