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Transport Industry - Mapping your Tax route for the New Financial Year

Having entered the New Financial Year, the 2019-20 Fiscal Year is likely to be a very exciting period for the Transportation industry. Transport Industry - Graphic (1)

The release of last month's State Budget highlighted how the sector will benefit from increased investment in transformative infrastructure, with the Queensland Government announcing its delivery of $5.625 billion for new and upgrade projects across the State.

This announcement, along with the New Financial Year, Instant Asset Write-Off increases, and updates to the ATO's Fuel Tax Credits scheme - present an ideal time for business owners/operators within the sector to consider their business planning and strategy.

To assist with this, we have commented on two tax incentives which can help assist operators for 2019-20.

Instant Asset Tax Write-Off

Earlier this year, the Senate passed the Government's proposal to increase the Instant Asset Write-Off for SME business to $30,000 alongside an extension to 30 June 2020.

For those operating within the Transport industry, the presents an opportunity to purchase or install assets which assist in business growth & development.

The write-off can be used on new or second-hand plant and equipment such as vehicles, tools, and office equipment.

It is important to consider the needs of your business when making a decision, and a professional advisor, such as Archer Gowland, can help assess how purchases will impact your cash-flow or finances.

Fuel Tax Credits Scheme

As part of the Fuel Tax Credits scheme, heavy vehicle operators may be eligible to claim further tax credits for fuel used to power auxiliary vehicle equipment.

This eligibility is subject to select criteria surrounding fuel types and applied to heavy vehicles (including emergency vehicles) with a gross vehicle mass greater than 4.5 tonnes.

It is important to note that fuel used to power the auxiliary equipment may be sourced from a separate fuel tank or from the tank that fuels the main engine. Additionally, the auxiliary equipment may also take its power from the main engine, which in turn increases the fuel used.

We have included an outline of eligible businesses, suitable to claim the Fuel Tax Credits:

  • Concrete transportation vehicles
  • Refrigerated vehicles
  • Waste management collection vehicles
  • Long haul vehicles with sleeper cabins
  • Vehicles with specialised Auxiliary equipment (ie. Trucks with equipment for unloading/loading, elevated work platforms, truck-mounted loader cranes, drilling equipment, pumping equipment, and truck blower for dry goods).

Additionally, we have included a list of eligible fuel types which can be claimed:

  • Liquid fuels (for example, Diesel or Petrol)
  • Blended fuels (B5, B20, E10)
  • Liquefied petroleum gas (LPG) (duty paid)
  • Liquefied natural gas (LNG) or Compressed natural gas (CNG) (duty paid)
  • Blended fuel (E85)
  • B100

In order to ensure compliance and eligibility for Fuel Tax Credits, it is important you keep records or the types of fuel you acquired, when it was acquired, and the business activities in which it was used.

We have provided the following table as an example of the records you may been to keep:

Heavy Vehicles (more than 4.5 tonnes GVM) Activity Examples of records you may need to keep
Garbage truck, tip truck, refrigeration truck Fuel for travelling on public roads to work-site or on-route General odometer readings (eg. servicing), route distances, fuel purchases/issues
Auxiliary equipment used while the heavy vehicle is travelling on public roads - for example, a garbage truck, concrete truck, refrigeration truck  Bin lifting and compaction mechanism of a garbage truck, mixing barrel of a concrete truck, refrigeration unit or refrigerated truck See PCG 2016/11 for acceptable percentages, evidence to support any fair and reasonable method of apportionment of the fuel
Auxiliary equipment of a heavy truck used while the vehicle is not travelling on public roads Truck mounted drill at a building construction site or a water tanker while spraying off-road Specific records (or percentages based on previous actual records) of fuel used in specific work activities.

 

For More Information

For more information on your eligibility to claim additional Fuel Tax Credits or an initial consultation, please contact Smiljan Jankovic, Director - Archer Gowland, on (07) 3002 2699.

 

Disclaimer

The information contained in this article is of a general nature and does not take into account personal circumstances. Before making any decisions based on the factual information contained in this document, please consult with your financial adviser.

   
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