Fuel Tax Credits: BAS Checklist for Australian Small Businesses
Published January 28th, 2025 | Updated June 5th, 2026 | Team Gimbla
Fuel tax credits are Australian credits for the fuel tax included in the price of eligible fuel used in business activities. They are not a general discount for every car, ute or fuel receipt. A business usually needs GST and fuel tax credit registration, eligible fuel use, current rates and records that support the litres, dates and business activity claimed.
For small businesses, the practical job is to treat fuel tax credits as a BAS evidence task. Check eligibility first, split fuel use by activity, use the rate that applies when the fuel was acquired, keep the working paper, then record the credit cleanly in the books.
Fuel tax credits reduce the tax cost of eligible business fuel use, but the claim is only as reliable as the vehicle, activity, rate and record behind it.
Quick answer
Businesses can claim fuel tax credits for eligible taxable fuel used in eligible business activities, such as machinery, plant, equipment, heavy vehicles over 4.5 tonnes, and light vehicles travelling on private roads. The Australian Government’s fuel tax credit guide says businesses must be registered for GST and fuel tax credits before they can claim, and that claims are made on the Business Activity Statement (BAS).
Fuel tax credit rates change regularly, so do not reuse an old table. The ATO’s fuel tax credit tools are the safest place to check eligibility and calculate the BAS amount.
Key points
- Fuel tax credits are claimed through the BAS, not as a normal supplier discount.
- Light vehicles travelling on public roads are generally not eligible.
- Fuel use may need to be split between on-road, off-road, auxiliary equipment and other business uses.
- Rates can change inside a BAS period, so the acquisition date matters.
- Fuel tax credits are assessable government industry payments, so they also need to be recorded for tax return work.
Who can claim fuel tax credits?
Eligibility depends on the fuel, the business activity and the registration status. Start with three checks before looking at rates.
| Check | What it means | Records to keep |
|---|---|---|
| Registration | The business needs GST registration and fuel tax credit registration. | ATO registration details and BAS records. |
| Fuel type | The fuel must be taxable fuel, such as liquid fuel, fuel blends or eligible gaseous fuel. | Fuel invoices, receipts or fleet card statements. |
| Business activity | The fuel must be used in an eligible business activity, not private use. | Vehicle records, equipment registers, logbooks, GPS data or job records. |
| Rate period | The claim should use the rate that applies when the fuel was acquired. | Acquisition dates and calculator or rate-table working papers. |
If the answer is unclear, use the ATO eligibility tool or ask a registered tax or BAS agent before claiming. A small error can flow into the BAS, GST records, income tax return and later ATO review.
Common eligible and ineligible fuel use
Fuel tax credit eligibility is not based only on whether the fuel was bought by the business. It depends on what the fuel was used for.
| Fuel use | Typical treatment | Practical check |
|---|---|---|
| Heavy vehicles over 4.5 tonnes on public roads | May be eligible, usually with road-user-charge treatment reflected in the rate. | Confirm vehicle weight, fuel type, travel records and current rate. |
| Machinery, plant or equipment | May be eligible when used in business activities. | Keep equipment records and fuel allocation notes. |
| Off-road or private-road business use | May be eligible, depending on the activity and fuel. | Separate it from public-road light-vehicle use. |
| Light vehicles on public roads | Generally not eligible for fuel tax credits. | Do not treat every ute, van or car fuel receipt as claimable. |
| Private fuel use | Not eligible. | Apportion mixed business and private use before calculating the claim. |
For example, a landscaping business may use diesel in a truck, a mower, a generator and a director’s ute. Those uses may not all have the same treatment. The claim should show how the business separated each use instead of applying one rate to every fuel invoice.
What changed in 2026?
From 1 April 2026, temporary fuel excise and heavy vehicle road user charge relief changed fuel tax credit rate checks for affected businesses. The Department of Infrastructure’s road transport payment relief page notes that these supports include reductions to Road User Charging and Excise, plus the ATO fuel response payment plan.
The practical points for a small business are:
- use the rate for the date the fuel was acquired
- split fuel records when a BAS period crosses a rate change
- avoid copying old August 2024 or February 2025 example rates into a 2026 claim
- check whether public-road heavy vehicle use, off-road use and auxiliary equipment now produce different outcomes
- watch for the next rate change or the end of temporary relief before the next BAS
If the business is in road transport and fuel costs have affected tax payment capacity, the Department of Infrastructure says the ATO fuel response payment plan is available by application until 30 June 2026. That is a separate cash-flow support measure, not the same thing as a fuel tax credit claim.
How fuel tax credits appear on the BAS
Fuel tax credits are claimed in the fuel tax credit section of the BAS after the business works out the eligible amount. A tidy BAS file usually includes:
- the fuel invoice, receipt, docket or fleet card statement
- the acquisition date and litres
- the vehicle, equipment or activity category
- any split between eligible and non-eligible use
- the rate used for that acquisition date
- the calculation used to reach the BAS amount
- the accounting entry or report that records the credit
The same BAS may also include GST, PAYG withholding or PAYG instalments. Keep the fuel tax credit working paper separate enough that it can be reviewed without confusing it with GST credits or ordinary motor vehicle deductions.
Records to keep before you claim
Fuel tax credit records should show what was bought, when it was acquired, how it was used and how the claim was calculated. Useful records can include:
- supplier invoices, receipts, fuel dockets or card statements
- vehicle and equipment lists
- odometer readings, logbooks, GPS data or route records
- job sheets or site records for machinery and equipment
- rate tables or ATO calculator outputs used for the period
- apportionment notes for mixed use
- BAS workpapers and review notes
The Australian Government guide says fuel tax credit claims generally need to be made within four years. The ATO also expects businesses to keep records that explain and support the claim. If a claim is material, unusual or split across several fuel uses, keep the working paper clear enough that another person can follow it later.
How Gimbla can help
Gimbla helps keep fuel expenses, supplier bills, GST coding, BAS records and bank reconciliation in the same accounting workflow. That matters because a fuel tax credit claim should connect back to the source fuel purchase and the BAS period, not sit in a standalone spreadsheet with no audit trail.
A practical workflow is:
- Record the fuel purchase or fleet card bill.
- Attach or retain the source document.
- Categorise the expense and GST treatment.
- Prepare the separate fuel tax credit working paper.
- Review the BAS amount before lodgment.
- Reconcile the payment and keep the report with the period records.
If your BAS also includes GST or PAYG items, use the BAS and IAS types guide and the GST, VAT and sales tax guide alongside the fuel tax credit working paper.
Common mistakes
Using an old rate table
Rates can change in February, August or during temporary relief periods. Always check the current ATO rate or calculator for the acquisition date.
Claiming light-vehicle public-road fuel
Fuel used in a light vehicle on a public road is generally not eligible, even when the vehicle is used for business. Review the vehicle weight and where the fuel was used.
Mixing GST credits and fuel tax credits
GST credits and fuel tax credits are different claims. A fuel invoice may affect both, but the calculations, labels and review questions are not the same.
Forgetting apportionment
Fuel used across several vehicles, equipment items or activity types may need to be split before the claim is calculated.
Recording the credit as a normal expense reduction only
Fuel tax credits are also business income for tax return purposes. Keep the BAS and accounting treatment clear enough for year-end review.
Frequently asked questions
Who can claim fuel tax credits in Australia?
A business generally needs to be registered for GST and fuel tax credits, use taxable fuel in eligible business activities, and keep records that support the claim. Use the ATO eligibility tool if the activity, vehicle or fuel type is not straightforward.
Can I claim fuel tax credits for a ute?
Fuel used in a light vehicle travelling on public roads is generally not eligible. A ute may still create normal motor vehicle expense records, but that is different from a fuel tax credit claim.
What changed for fuel tax credits in 2026?
Fuel tax credit rates changed from 1 April 2026 during temporary fuel excise and road user charge relief. Businesses should use the rate for the fuel acquisition date and split records if a BAS period includes fuel acquired before and after a rate change.
Where do fuel tax credits appear on the BAS?
Fuel tax credits are claimed in the fuel tax credit section of the BAS after the business calculates eligible litres, use categories and rates. Keep the supporting working paper with the BAS period records.
In short
Fuel tax credits can reduce the tax cost of eligible business fuel use, but they are not a shortcut for every fuel receipt. Check registration, activity, vehicle use, rates and records before the BAS is lodged. If fuel costs are causing broader cash-flow pressure, treat the ATO payment-plan support as a separate question from the credit calculation.