ANSWER ID:9489

This support note explains how to record fuel tax credits and how this is subsequently reflected on your BAS.

Note: If you're using BusinessBasics or FirstEdge, see our support note Fuel Tax Credits: BusinessBasics and FirstEdge.

How do I determine the amount of fuel tax credit I am eligible to claim?

If you have used a special account to track your fuel tax credits you can determine the amount of fuel tax credit for a given BAS period by performing a Find Transaction on the account in question:

1. Click Find Transactions at the bottom of any command centre.
   
2. Click the Account tab.
   
3. Set the Search by field to Account.
   
4. Set the Account field to the account you have set up to track your fuel tax credits.
   
5. Specify a date range. All transactions for the account within the specified date range will be displayed.

The credit amount would normally be the net change in the account over the period.

If you have questions about claimable fuel tax credits contact the Australian Taxation Office (ATO) or your accounting advisor.

How do I record fuel tax credits in my software?

You can record a general journal entry to reflect any fuel tax credit amounts for a given reporting period.

This journal entry would involve two accounts:

• A 4-XXXX or 8-XXXX Income account which would be credited. This increases income which amounts to decreasing expense.
• A choice of a 2-XXXX Liability account or 1-XXXX Asset account which would be debited.

If you want to keep your tax credit account grouped with your other tax liability accounts, such as GST collected and paid, choose a liability account.

Note: For instructions on creating a new account, refer to the Help Centre. For information on entering general journal entries, refer to our support note .

Example journal entry:

If the amount of a fuel tax credit for a period is $1,000 for the reporting period ending 31/01/2013, the journal entry would look similar to the example shown below:

What BAS fields are used for fuel tax credits? How do I activate them in BASlink?

7C and 7D

To activate these fields in BASlink:

1. Go to the Accounts command centre and click BASlink.
   
2. Click BAS Info. The BAS Information window is displayed.
   
3. Select the option I Claim Fuel Tax Credits as shown below.
    

How do I setup these fields?

When you go to Back Sheet you'll see these new fields with either Link or Setup buttons; in some cases both.

7C - Fuel tax credit over claim

This field is used to record fuel tax credits that may have been over-reported in previous periods.

To complete this field:

1. Click Link next to the 7C field. The Field Link window is displayed.
   
2. Select the account that you want to link to this field by clicking in the Select column next to the applicable account. In the example above, select the 2-6000 account.
   
3. Click OK.
4. Enter in the amount of the overclaim manually to allow BASlink to finish the calculations.

7D- Fuel tax credit

Complete this field if you are entitled to claim fuel tax credits.

To complete this field:

1. Click Setup next to the 7D field. The Field Setup window appears.
   
2. Select the account that you want to link to this field by clicking in the select column next to the account. In the example above, select the 4-6100 account.
   Note: If your specific account is not listed, run the Profit & Loss [Cash]report to refresh the account list. This report is found under the Accounts tab in the Index to Reports.
   
3. Click OK.
   
4. Click the Link button next to the 7D field. The Field Link window is displayed.
   
5. Select the account that you want to link to this field by clicking in the Select column next to the applicable account. In the example above, select the 2-6000 account.
   
6. Click OK.

How does the credit amount get cleared from BAS reporting period to BAS reporting period?

When you record your ATO payment (using a Spend Money transaction) or ATO refund (using a Receive Money transaction), you normally select allocation accounts which will reflect a change in your tax liabilities. Similarly, you would make an allocation to the asset or liability account for fuel tax credits.

For more information on this transaction, please see Recording an ATO payment or credit.