Tech Talk

Protect your business from overclaiming fuel tax credits

By National Road Transport Association

Recently, the Australian Taxation Office (ATO) released a taxpayer alert that warned organisations about the risk of overclaiming fuel tax credits (FTC). 

The alert also highlighted the need to consider GPS-based telematics solutions that were covered by a Product or a Class ruling, for ultimate peace of mind that your FTC reports are correct.

If you’re currently using – or considering – a telematics solution to track, apportion and submit FTC claims, you may be wondering what all of this means for you.

We’ve broken down what you need to know. 

Am I at risk of overclaiming?

When claiming for fuel tax credits, businesses are entitled to claim the highest rate for fuel used other than for travel on a public road. 

This extends to fuel used in road construction and maintenance activities even when on public roads. Calculating this manually is notoriously difficult, which has historically resulted in many businesses claiming inaccurate amounts.

However, the ATO has recently increased focus on FTC compliance as a result of significant over-claims made using some GPS systems, which rely on timed data or algorithms. 

Unusually large refunds that have been claimed using GPS technology are being closely reviewed, and any incorrect claims could leave you at risk of significant penalties and interest.

How can I select a GPS system that protects me from overclaiming?

When you’re selecting a telematics solution to manage your FTC claims, it’s important to check for a Product or Class ruling, to give you peace of mind that the data and your subsequent claim is accurate.

A Class ruling from the ATO confirms that the reports produced by the solution can be used as a record for making FTC claims. The way you interpret these reports to make your claim can still come under scrutiny.

A Product ruling, in comparison, provides certainty that the ATO considers your FTC claims to be fair and reasonable, so you can rest assured that you won’t be penalised for overclaiming.

Currently, the only GPS solution in Australia to have a Product ruling and current Class ruling is Teletrac Navman’s FTC Manager solution, which also offers detailed fuel tax consulting services from PPM Tax and Legal.

What else should I look for in a GPS solution for FTC management?

Peter Perich, director at PPM Tax and Legal, says it’s crucial to use second-by-second location data rather than relying on algorithms or timed data to calculate fuel tax credit claims.

Unlike other GPS-based FTC calculation systems, Teletrac Navman’s FTC Manager operates exclusively using second-by-second, high-definition GPS data from systems already installed in customer vehicles. 

“This means the system can accurately calculate off-road travel and auxiliary fuel use to maximise fuel tax rebates. It helps businesses claim a better return, to improve cashflow and re-invest the money back into the business,” said Perich.

The system provides industry leading accuracy by automatically classifying the entire Australian road network as either on- or off-road. 

“As the only solution in Australia to be backed up by the ATO’s product ruling, it significantly minimises risk in over-claiming, and provides a far higher level of protection, to give you peace of mind.”

FTC Manager falls into Teletrac Navman’s TN360 suite of AI-enabled fleet management systems, providing businesses with an all-in-one platform to streamline every element of fleet operations. 

To date, FTC Manager is one of the most comprehensive automated solutions available on the Australian market.

With a Product and Class ruling, backed by the ATO, you can be confident that you can maximise your FTC rebates without leaving your business open to risk of penalties for overclaiming.

Disclaimer: The Commissioner of Taxation (Commissioner) does not sanction, endorse or guarantee this product. Further, the Commissioner gives no assurance that the product is commercially viable, that charges are reasonable, appropriate or represent industry norms, or that projected returns will be achieved or are reasonably based.

Potential participants must form their own view about the commercial and financial viability of the product. The Commissioner recommends you consult an independent financial (or other) adviser for such information.

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