If you’re a sole trader or small business owner claiming fuel tax credits, it’s important to know that fuel tax credit rates have changed from 1 April 2026. While the change may seem minor, using the wrong rate could affect the amount you claim and may lead to errors in your Business Activity Statement (BAS) or tax reporting.
Fuel tax credits allow eligible businesses to claim back the fuel tax included in the price of fuel used for business activities, such as running heavy vehicles, machinery, generators or equipment.
What’s changed? The Australian Government temporarily cut fuel excise on petrol and diesel for three months. Because fuel tax credits are based on the amount of excise included in the fuel price, the reduction in excise has directly reduced the credit businesses can claim in the 3 month period from 1 April 2026.
This means: fuel bought before 1 April 2026 must be claimed at the old rate; and fuel bought on or after 1 April 2026 must be claimed at the new rate. If you purchased fuel across both periods, you may need to use two different rates when calculating your claim. You can find the latest fuel tax credit rates on the ATO website.
Why this matters
Your claim amount may change. Even a small rate adjustment can affect the total amount you’re entitled to claim, particularly if fuel is a regular business expense. Using the updated rates ensures you are claiming the correct amount.
Good record keeping is essential. To claim accurately, you need records that show when fuel was purchased, how much was bought, and that it was used for eligible business purposes. This is especially important if you’re preparing your own BAS.
Errors may delay or affect your return. Using the wrong fuel tax credit rate may result in overclaiming or underclaiming. This can lead to BAS corrections later, or delays if the ATO reviews your claim.
Fuel costs affect cash flow. Fuel tax credits can provide valuable cash flow support, perhaps especially for sole traders and contractors. Claiming the right amount helps ensure you receive the full benefit available.
What you should do now. If you claim fuel tax credits, review any fuel purchases made from 1 April 2026 onward and make sure you’re applying the updated rate. The ATO offers an online fuel tax credit calculator to help work out the correct amount based on the fuel type, purchase date and business use. Staying on top of rate changes helps keep your BAS accurate and ensures you don’t miss out on valuable tax credits.