February fuel tax credit rates change
Fuel tax credit rates change regularly. They also vary depending on when you acquire the fuel, what fuel you use and the activity you use it for.
Fuel tax credit rates are indexed twice a year, in February and August, in line with the consumer price index (CPI). The CPI is released towards the end of January and July, five days before the rates are changed. Fuel tax credit rates will be updated as soon as they become available.
Rates may also change for fuel used in a heavy vehicle for travelling on public roads. This is due to changes to the road user charge which is reviewed annually.
As of Monday 1 February 2016 fuel tax credit rates change due to indexation.
Fuel tax credit rates are indexed in August and February in line with the consumer price index.
You may need to use more than one rate in a BAS period.
Use the Fuel tax credit calculator to help you get your claim right.
For details of the fuel tax credit changes go to ato.gov.au/fueltaxcreditrates
CHANGES TO CAR ALLOWANCES
Claiming work-related car expenses is a common tax-time claim for many taxpayers. In fact, almost 4 million taxpayers claim the deduction each year. There are of course certain rules that must be adhered to in claiming these expenses and these days, the Australian Tax Office takes a close interest in such claims given the cost to the revenue.
The Treasurer announced in the 2015-16 federal budget that the methods used for calculating work-related car expense deductions would be simplified and modernised – in other words, changed.
Currently, taxpayers have an option to use one of four methods to determine their work-related car expense deductions:
- cents per kilometre
- logbook method
- the 12% of original value method, and
- one-third of actual expenses incurred.
Changes to car allowances mean if you are paying your employees a car allowance in excess of 66c per kilometre, you need to withhold tax on the amount you pay over 66c.
If you haven’t been doing this since July 2015, you should begin to withhold tax on the amount you pay over 66c and advise your employees.
What if your employees think that not withholding until now might result in them getting a tax bill?
Depending on the amount you’ve paid them, this shouldn’t have a significant impact on their tax for the year. But you can agree to increase the amount you withhold for the remainder of the financial year to cover the shortfall.
Welcome to the new year! We’re also now halfway through the financial year.
This month we’re looking at updates on:
- Reminder to get SuperStream ready
- Changes to car allowance
- February fuel tax credit rates change
If you have any queries at all, please get in touch.