Fuel Tax Credits (FTC)
EROAD's FTC product lets your company claim rebates on all of the fuel tax you have paid, for vehicles or fuel-operated equipment, on or off-road.
You can maximise the rebate you are entitled to you with EROAD FTC, even when fuel prices or fuel tax credit rates change. By automating the rebate process your fuel tax credits will be automatically calculated and reported for your business activity statements, reducing admin time and making the rebate process easier. And if you can show a six-month pattern of consistent use via telematics, you can claim fuel tax credits for the previous 4 years.
It is important that you retain records which can back up your claimed fuel burn rate in the case of an audit. https://www.ato.gov.au/business/fuel-schemes/fuel-tax-credits---business/working-out-your-fuel-tax-credits/records-you-need-to-keep/
Sometimes it can be a lot of effort to get these figures, so it may only make sense to chase these down for vehicles which may idle off-road a lot. Once these are established for each of your vehicles, enter them in the FTC 'Settings' page.
Optimising your FTC Claim
1. Establish your idle fuel burn
You need to ensure that fuel used by your vehicles when idling off public roads is being included in your claim. The EROAD FTC solution automatically calculates when your vehicle is off public roads and idling. It is important to provide your idle fuel consumption rate, so the EROAD FTC solution can then calculate the total fuel used while idling off-road. Please note: EROAD FTC doesn't count off-road idle time for light vehicles.
There are a few different methods for working out idle fuel burn for your vehicles.
The sampling method involves manually checking how much fuel a vehicle is using while it is at idle.
There are several different methods being used by our customers:
- Filling the vehicle with fuel, then running at idle for a set period of time, then re-filling. You can use the amount of fuel used for that set period to work out an idle fuel consumption rate.
- Attaching a flow meter to the fuel line of the vehicle. By recording the flow rate you can deem the idle fuel consumption rate. You'd need to get an expert to do this, as it could be misleading with certain types of fuel systems that have a return.
Using manufacturer-supplied idle fuel consumption rates. This information has not been readily available to use by our customers during the pilot.
- Engine Diagnostics (Recommended)
Several engine manufacturers' software packages are able to produce detailed fuel consumption figures, including idle fuel consumption. We've seen customers taking this approach successfully with Cummins engines.
Example of some idle fuel consumption rates produced from the Cummins software.
Average Fuel Rate
Fuel Economy - Idle
Fuel Rate (All Trips)
Fuel Economy - PTO
Fuel Rate (All Trips)
|Fuel Used (All Trips)||1020.1|
|Idle Fuel Used (All Trips)||377.5|
|Idle Time (All Trips)||000160:05:45|
We've heard anecdotally that some organisations are deducing an idle fuel burn rate from research into industry averages, but we're unsure that this is an approach we can recommend.
It's important that you retain records to back up your claimed fuel burn rate in the case of an audit. https://www.ato.gov.au/business/fuel-schemes/fuel-tax-credits---business/working-out-your-fuel-tax-credits/records-you-need-to-keep/
It can be a lot of effort to get these figures, so it may only make sense to chase these down for vehicles which may idle off-road a lot. Once these are established for each of your vehicles, enter them in the FTC 'Settings' page.
2. Establish your auxiliary equipment fuel consumption
The same approaches outlined above for establishing idle fuel consumption can be applied to establishing auxiliary equipment fuel consumption. It's important that your auxiliary fuel consumption rate doesn't include the idle fuel consumption of the vehicle. The rate should reflect the extra amount of fuel that the vehicle uses while using the auxiliary equipment.
For example, one approach might be:
- Filling the vehicle, running it at idle for a set period of time, then re-filling.
- You can use the amount of fuel used for that set period to work out a base idle fuel consumption rate.
- Then repeat the same test, over the same period of time, but with the auxiliary equipment also running.
- By taking the difference between these results, you can deduce your auxiliary equipment fuel consumption rate.
At times it can take extra effort to get these figures, so to be more efficient it makes sense to obtain figures for vehicles which have significant pieces of auxiliary equipment which consume a large amount of fuel and are used regularly. Once these are established for each of your pieces of auxiliary equipment, enter them in the FTC 'Settings' page.
3. Claim retrospectively
You are able to make a retrospective claim of up to four years of fuel tax credits; even if you've previously submitted a claim. This is done by establishing a pattern of consistent usage over a period of time.
For example, you might establish using EROAD's FTC Solutiont, that your business uses 10,000L of fuel over a 6 month period. Of this, 30% was used for auxiliary equipment, off-road idle and off-road travel. You'd then be able to apply that same pattern in order to make a retrospective claim.
You'll need to be able to demonstrate that the fuel used over this period, and the proportion of allocation to the high and low FTC rates are representative of the period that you're claiming for, i.e. that the size of your fleet hasn't doubled over the last four years.
It would definitely make sense to engage a tax accountant for checking retrospective claims - EROAD simply provides a good tool for establishing a pattern of usage.
Disclaimer: EROAD is not a tax adviser. Please seek independent tax advice to ensure that the figures you're entering into EROAD's FTC solution will be acceptable in the case of an audit.
In all circumstances, make sure you obtain your own legal advice.