§         This information explains what records you need to keep and how you calculate your eligible litres when you claim fuel tax credits.

§         The records you currently keep for your business will generally be enough to support your claims if they show that you:

§         acquired the fuel

§         used it in your business, and

§         applied the correct rate when calculating your claim.

§         Since 1 July 2006, businesses have been able to claim fuel tax credits for fuel they use in heavy vehicles and in a range of other business activities.

§         Eligibility expanded on 1 July 2008 to cover taxable fuel used in other business activities, machinery, plant and equipment.

§         To work out your fuel tax credits, and to support your claims, you need to keep records showing the amount of fuel you acquire, manufacture or import for your business activities and how you use that fuel. Start keeping the records you need now, so you are ready to calculate and claim your fuel tax credits when the time comes.

§         Before you can claim your fuel tax credits on your business activity statement (BAS), you need to calculate what you’re entitled to. There are three steps involved:

§         Step 1: Work out how many eligible litres of fuel you have used for each business activity that has a different fuel tax credit rate.

§         Step 2: Check what fuel tax credit rate applies to each of your activities.

§         Step 3: Work out the amount of your fuel tax credits in dollars by multiplying the number of litres by the relevant fuel tax credit rate (Step 1 x Step 2).

§         To work out how many litres are eligible, you can use:

§         the constructive method, where you add up the eligible litres of each type of fuel you acquired to use in your business, or

§         the deductive method, where you subtract the litres of ineligible fuel (for example, fuel used in cars on a public road for business purposes) from the total fuel you have acquired.

§         From 1 July 2007, the maximum co-contribution amount will stay at $1,500, and the self-employed may be eligible.

§         You are eligible for a co-contribution if:

§         you make a personal superannuation contribution by 30 June of that income year to a complying superannuation fund or RSA

§         you don’t claim a deduction in your income tax return for the contribution

§         your total income is below the income threshold ($58,980 in 2007-08 financial year)

§         10% or more of your total income is from running a business, eligible employment or a combination of both

§         you are less than 71 years old at the end of the income year, and

§         you do not hold an eligible temporary resident visa at any time during the income year.

§         You must meet all these requirements to be eligible

§         The maximum co-contribution amount that you can receive ($1,500) is reduced by 5 cents for each $1 of your total income over $28,980. The co-contribution phases out completely where your total income is $58,980 or more.

§         Provided you are entitled to receive the co-contribution, the minimum amount payable is $20.

§         The formula for calculating the maximum co-contribution amount is:

§         $1,500 - {[(assessable income + reportable fringe benefits) - $28,980] x 0.05}

§         The co-contribution payable is the lesser of:

§         the maximum co-contribution amount, or

§         the amount of personal superannuation contributions x 1.5.

§         The co-contribution:

§         must be preserved in the fund

§         is not included as income in your tax return

§         will not be subject to any taxation when initially paid to the fund, and

§         will not be taxed when received as a benefit.