Fuel excise changes and ATO support for eligible businesses

The Federal Government has developed a national fuel security plan

This comprises a range of measures including a temporary reduction in the fuel excise, a temporary reduction in the heavy vehicle road user charge, and some additional support measures for affected businesses administered by the Australian Taxation Office (ATO).

Introduction

As a part of the national fuel security plan, the ATO has been tasked with providing additional support to eligible businesses.
 
The most common fuel excise rates have reduced from 52.6 cents per litre (rate applicable from 2 February to 31 March 2026) to 20.6 cents per litre (rate applicable from 1 April to 30 June 2026).
 
The heavy vehicle road user charge has reduced from 32.4 cents per litre to nil.
 
The fuel tax credit rate has not reduced for heavy vehicle operators travelling on public roads.  However, the reduction in fuel excise has resulted in a corresponding reduction in the fuel tax credit rate for all other business uses.  The fuel tax credit rates claimable from 1 April to 30 June 2026 are as follows:

Fuel response payment plan

The Fuel Response Payment Plan is available for eligible businesses by application until 30 June 2026 and is designed to assist businesses experiencing cash flow pressure due to increased fuel costs.
 
The key features of the plans are:

• No upfront payment
• A flexible and extended payment term of up to 3 years (with up to 36 monthly instalments)
• General interest charge (GIC) remission – the ATO may remit GIC that accrues from the time of your application to the date of the third monthly instalment, provided:
•     You bring any outstanding lodgements up to date within 3 months of commencing the payment plan, and
•      You pay all instalments agreed under the payment plan for the first 3 months.

To be eligible for the fuel response payment plan a business will need to meet four criteria:

1. Increased fuel-related costs
Your business has incurred higher fuel costs, either directly or indirectly (e.g. through transport, logistics or supply chain expenses), resulting in increased operating costs.

2. Outstanding tax debt
You have an existing or new tax debt that the business is currently unable to service.

3. Reduced financial capacity linked to fuel costs
The financial pressure is specifically attributable to increased fuel prices, separate from a general downturn in business activity or ordinary cash flow issues.

4. Up-to-date lodgements
All activity statements and income tax returns must be lodged within 3 months of the payment plan commencing.
 
You can apply for a payment plan using Online services for business (or Online services for individuals if you are a sole trader), or via your tax agent using Online services for agents.
 
You will need to be able to make a declaration that you are an eligible business, can comply with the terms of the payment plan, and enter a direct debit arrangement with an Australian financial institution for payment processing.
 
The ATO fuel response payment plan can be accessed in addition to existing support services offered by the ATO for which your business may otherwise be eligible.
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Baumgartners can help

If you are eligible for a refund, from either an income tax return or activity statement lodgement, we can prioritise the processing of your returns. We can also assist with reviewing your eligibility for the fuel response payment plan. 
 
If you would like assistance, please reach out to your usual contact at Baumgartners. We would be happy to help you identify the most efficient and cost-effective solution for your business.