If you claim fuel tax credits (FTCs), your last three BAS lodgements might just have set off a silent alarm at the ATO.
Here’s why
On 1 April 2026, the ATO slashed FTC rates by 32 cents per litre to reflect the federal fuel excise cut. Thousands of businesses, especially in transport, logistics and trades, are still claiming the old, higher rate.
Some are doing it intentionally, hoping the ATO won’t notice. Others simply haven’t updated their software.
Either way, the ATO’s data matching systems are live and they’re flagging overclaims in real time.
An accidental $5,000 overclaim today could become a $15,000 audit bill (plus penalties and interest) by October.
Here are the three most common fuel tax traps we’re expecting in FY 2025-2026, how to fix them before your next BAS and the one documentation habit that will save you if the ATO comes knocking.
TRAP 1: Claiming the old FTC rate (the 32c/litre mistake)
Potential oversight
Before 1 April 2026, the FTC rate for heavy on road vehicles was 50.9 cents per litre. From 1 April, it dropped to 18.9 cents per litre to match the excise cut.
The trap
Many accounting software packages (Xero, MYOB, Reckon) haven’t auto updated their fuel tax credit tables. If you’re using a saved rate from March, you’re overclaiming by 32c/litre on every litre.
Potential scenario
A landscaping business with 4 utes claims 15,000 litres in April at the old 50.9c rate. That’s a $4,800 overclaim. The ATO’s system flags it within 48 hours of lodgement.
The fix
Amending the BAS took 20 minutes.
The penalty
$1,200 plus interest because the ATO deemed it a “failure to take reasonable care”.
The prevention
- Log into your software and manually update the FTC rate to 18.9c/litre for on road heavy vehicles (off road and heavy non road vehicles still claim the full rate).
- Re-calculate your April and May BAS before lodging.
- Keep a screenshot of the ATO’s rate table as evidence you took “reasonable care”.
TRAP 2: Mixing private and business use (the one vehicle disaster)
Potential oversight
You use the same ute for work runs and school drop offs. You claim 100% of the fuel as a business expense because “it’s mostly work”.
The trap
The ATO doesn’t care about “mostly”. If you can’t prove the business use percentage with a logbook or GPS data, they’ll default to 50% and reassess you for the difference, plus penalties.
Potential scenario
A plumber claims $8,400 in fuel credits for his Hilux. The ATO audits him after his claim was 3x the industry average. He had no logbook. They allowed 50%, reassessed $4,200 as a private benefit and hit him with a 25% penalty ($1,050) plus interest.
The fix?
- Option A (best)
Run a 12 week logbook starting today. It’s valid for 5 years and gives you a defensible business use percentage. - Option B (quick fix)
Use a GPS tracking app (such as Drivewyze or Fuelly) for 4 weeks to establish a pattern. It’s not as robust as a logbook, however it’s better than nothing if the ATO asks. - Option C (last resort)
Default to 50% now and amend later if your actual percentage is higher. Better to underclaim than overclaim.
TRAP 3: Receiptless claims (the bank statement myth)
Potential oversight
You lost the fuel receipts however kept the bank statements. You figure the ATO will accept that as proof.
The trap
Bank statements show where you spent money, not what you bought.
The ATO’s position is clear: without a tax invoice showing litres purchased, price per litre and date, you can’t claim FTCs.
Potential scenario
A transport operator claims $22,000 in FTCs with only bank statements.
The ATO disallowed the entire claim.
Why?
The statements showed payments to BP, however didn’t prove the fuel was for business vehicles (could have been for private cars, generators or even resold). The reassessment cost $28,000 including penalties.
The fix
- Digital receipts
Use apps such as FuelMap Australia or MyFuel to scan receipts immediately. They auto extract litres, price and date. - Fleet cards
Switch to a fuel card (AMPOL Cardlock, BP Connect, Shell Card). These generate ATO compliant tax invoices automatically. - Reconstruction
If you’ve lost receipts, contact the fuel retailer. Most can reissue invoices for transactions up to 12 months old if you provide the card number and date.
THE RED FLAG CALCULATOR: Is your claim anomalous?
The ATO doesn’t audit randomly anymore. Its system compares your claim against industry benchmarks. If you’re an outlier, you’re flagged.
Quick self test:
- transport/logistics: > 40,000 litres/year per heavy vehicle = red flag.
- trades (plumbing, electrical): > $15,000/year fuel claim per vehicle = red flag.
- agriculture: > 60,000 litres/year per tractor/harvester = red flag.
If you’re above these thresholds, don’t panic. However, ensure your documentation is bulletproof.
The ATO isn’t saying you can’t claim it, they’re saying you’d better prove it.
YOUR NEXT STEP: A 48 Hour FTC health check
We’re offering a Fuel Tax Credit Health Check (charges may apply).
In 72 hours, we’ll:
- Review your last 3 BAS lodgements for rate errors.
- Benchmark your claim against ATO industry data.
- Identify any private use exposure.
If we find an overclaim, we’ll amend it for you.
If we find an underclaim, you’ll receive a refund.
Email with ‘FTC CHECK’ and we’ll get started.
The ATO’s data matching is live.
Every BAS you lodge with the wrong rate is a ticking time bomb. Don’t wait for the amendment notice to find out.