June 2013 Newsletter 

In this edition:

Welcome

Retirement Villages and Aged Care: Is there a Difference?

End of year Superannuation tax planning

Fuel tax credits - Changes from 1 July 2013

Superannuation and Powers of Attorney: Part 1

How are fuel tax credit rates changing?
Fuel tax credits provide you with a credit for the fuel tax (excise or customs duty) included in the price of fuel you use for certain business activities and from 1 July 2013 fuel tax credit rates are changing.

Please note that there will be:

• Some rate changes due to increased carbon charge amounts;
• Rate changes for transport and non-transport gaseous fuels; and
• A possible rate change for fuels used in heavy vehicles for travelling on public roads.

In addition, rates for some fuels are changing for entities declared by the Clean Energy Regulator to be a designated opt-in person under the opt-in scheme.

When you calculate your fuel tax credit claim, you need to use the rate that applied when you acquired the fuel. However, for fuel used in heavy vehicles for travelling on a public road, you need to use the rate in effect at the beginning of the tax period covered by your business activity statement (BAS).

Rate changes due to increased carbon charge amounts

From 1 July 2013, the fuel tax credit rates for:

• Non-transport gaseous fuels used in specified agriculture, fishing or forestry activities will increase because the rate is equal to the carbon charge amount; and
• Transport gaseous fuels will increase due to the annual increase in excise duty for these fuels (until 30 June 2015) under a different measure - some fuel tax credit rates for these fuels are also reduced by the carbon charge amounts.

The carbon charge is an amount equal to the price of carbon emissions from the use of liquid or gaseous fuels. This charge varies for the different fuels depending on their carbon emissions.

Carbon charge amounts will increase annually, reducing fuel tax credit rates until 30 June 2015. The rates may then be adjusted every six months from 1 July 2015.

Example - Reduced fuel tax credit rates due to the carbon charge:
John's Landscaping uses diesel and petrol in its business equipment. Currently, John claims 31.933 cents per litre for diesel used in his ride-on mower and 32.623 cents per litre for petrol used in his whipper-snippers. From 1 July 2013, the carbon charge amount for petrol and diesel will increase, reducing the fuel tax credit for these fuels. John will claim 31.622 cents per litre for diesel and 32.347 cents per litre for petrol for fuel acquired from this date.

Fuel not affected by the Carbon Charge

The carbon charge does not affect fuel tax credit rates for: 

1. Liquid and transport gaseous fuels used in:Heavy vehicles with a gross vehicle mass (GVM) greater than 4.5 tonne travelling on public roads - diesel vehicles acquired before 1 July 2006 can equal or exceed 14.5 tonne;

• Specified agriculture, fishing or forestry activities; and
• Activities that do not involve combustion of the fuel - for example fuel used to clean machinery.

2. Liquid fuels used by businesses covered by the opt-in scheme.

3. Renewable fuels such as biodiesel or fuel ethanol.

Transport and non-transport gaseous fuels

Transport gaseous fuels
Transport gaseous fuels used in heavy vehicles for travelling on public roads are reduced by the road user charge, which currently reduces any fuel tax credit entitlement to nil.

The fuel tax credit rates for transport gaseous fuels acquired from 1 July 2013 will increase due to the annual increase in excise duty for gaseous fuels (until 30 June 2015). Some fuel tax credit rates for these fuels are also reduced by carbon charge amounts.

If you acquire transport gaseous fuel and use it in eligible business activities, including non-transport activities, you may be entitled to fuel tax credits. 

Non-transport gaseous fuels
From 1 July 2013, carbon charge amounts for gaseous fuels will increase. This will increase the fuel tax credits available for non-transport gaseous fuels used in specified activities in:

• Agriculture
• Fishing
• Forestry.

Fuel tax credits will not be available for non-transport gaseous fuels used in any other activities.

From 1 July 2013, fuel tax credits will no longer be available for non-combustible uses of non-transport LPG or LNG, such as LPG used as a propellant in the manufacture of aerosols.

Possible change for fuel used in heavy vehicles for travelling on public roads
The fuel tax credit rate for heavy vehicles that use fuel for travelling on a public road is reduced by the road user charge, which is subject to change.

After subtracting the road user charge, the fuel tax credit rate for liquid fuels (for example, diesel or petrol) used in heavy vehicles is currently 12.643 cents per litre, but this may change from 1 July 2013.

For transport gaseous fuels used in heavy vehicles for travelling on public roads, the road user charge currently reduces any fuel tax credit to nil.

A heavy vehicle has a gross vehicle mass (GVM) greater than 4.5 tonne. Diesel vehicles acquired before 1 July 2006 can equal 4.5 GVM tonne.

Are you in the opt-in scheme?
Certain large users of liquid fuels can apply to the Clean Energy Regulator to opt-in to the carbon pricing mechanism. If the application is accepted, they will be declared a designated opt-in person. From 1 July 2013, a designated opt-in person will discharge their carbon liability on their liquid fuel use through the carbon pricing mechanism instead of through the excise and fuel tax credit systems.

If you are a designated opt-in person who is registered for fuel tax credits: The fuel tax credit rates for liquid fuels you acquire from 1 July 2013 will no longer be reduced by the carbon charge - therefore you can claim the full rate of 38.143 cents per litre for liquid fuels you use in eligible off-road activities, such as construction, mining or landscaping. You will be able to claim fuel tax credits at a rate equal to the carbon charge for domestic aviation fuels you acquire from 1 July 2013.