April 1, 2026 | Tax Strategy

Understanding Fuel Tax Credits

Key Takeaways

**Fuel Tax Credits (FTC)** give you a credit for the "excise" (tax) included in the price of fuel used for business activities.
In 2026, you can claim FTC for fuel used in **heavy vehicles** (over 4.5 tonne GVM) and certain **off-road machinery.**
Record-keeping is critical; you must track your litres used and the specific activity for each drop of fuel.

In 2026, the price of diesel and petrol remains a significant overhead for Australian businesses in construction, agriculture, and transport. The **Fuel Tax Credit (FTC)** scheme is a powerful way for your business to recoup a portion of your fuel costs from the ATO. But this isn't a GST claim—it's a credit for the specific "excise" tax built into the fuel price. Here is our 2026 guide to maximizing your FTC.

1. Who Can Claim FTC?

You MUST be registered for GST and the Fuel Tax Credit scheme to claim. Common businesses that benefit in 2026 include:

**Heavy Transport:** Using vehicles with a GVM (Gross Vehicle Mass) of more than 4.5 tonnes on public roads.
**Construction:** Using excavators, bobcats, or generators on-site.
**Agriculture:** All fuel used in farm machinery and off-road vehicles.
**Marine:** Certain commercial vessels.

2. How are the Rates Calculated?

The FTC rates change twice a year (February and August) in line with the consumer price index (CPI). In 2026, there are two distinct types of rates:

On-Road Use:** For heavy vehicles traveling on public roads. The rate is reduced by a "Road User Charge" (RUC).

Off-Road Use:** For fuel used in auxiliary equipment (like a concrete mixer or a crane) or machinery that never leaves the site. This rate is usually much higher (often the full excise amount).

3. Record-Keeping is the ATO's Focus

In 2026, the ATO is more aggressive in auditing FTC claims. You must have data for:

** Litres Used:** Total litres of fuel purchased during the quarter.

**Activity Split:** How many litres were used off-road vs. on-road.

**Vehicle Log:** The specific vehicles or machines that used the fuel.

💡 Pro Tip: Most modern **GPS Telematics** systems now include "automated FTC" reports. They track when a truck is parked and using its engine for off-road activity, which can lead to thousands of dollars in extra credits for "auxiliary use."

Summary: Better Data, Lower Costs

A well-managed Fuel Tax Credit claim is "free money" back from the tax office for businesses with significant fuel needs. At PrepMyBook, we help our clients reconcile their litres and apply the latest 2026 FTC rates every BAS quarter. Let's make 2026 your most efficient tax year yet.

Audit Your Fuel Tax Credit Claims Today

Our tax specialists can help you review your fuel records and identify the "missing" credits in your current BAS. Let’s protect your cash flow from fuel price spikes.
Talk to a Tax Specialist