XBert Type: Standard
Accounting Software: Xero, MYOB, QuickBooks Online
Country Restriction: Australia only
Risk Type: Tax Risk
Business Function: Compliance
Overview
This XBert looks for money you may be leaving on the table. It checks whether a business is spending a meaningful amount on fuel but has no account set up to record Fuel Tax Credits. When that happens, it can be a sign the business is eligible to claim Fuel Tax Credits from the ATO and simply isn't. Unlike most XBerts, this one isn't pointing out a mistake, it is flagging a possible refund the business could be entitled to.
What it does
It scans the chart of accounts in the trial balance. It looks for an expense account that records fuel, diesel or petrol with a material amount spent over the year. At the same time, it checks whether the business has any account set up to record Fuel Tax Credits, such as an account named "Fuel Tax Credits", "Fuel Tax Rebate" or "Fuel Rebate". It then compares the two: real fuel spend on one side, and whether a Fuel Tax Credit account exists on the other.
How it works
The XBert raises a flag when both of these are true:
The business has a fuel, diesel or petrol expense account with a yearly balance above a materiality amount (by default A$5,000), and
There is no Fuel Tax Credit account anywhere in the chart of accounts.
It looks at the most significant fuel account for the business and reports the yearly spend on it. It raises this once per business, so you are not chased on every individual fuel account. It deliberately stays quiet when fuel spend is small, or when a Fuel Tax Credit account already exists, because in those cases there is nothing to nudge you about. Because the ledger cannot tell what the fuel is actually used for, this is a prompt to check rather than a definite finding. Where the account name suggests the kind of use that is usually eligible, such as diesel, heavy vehicles, trucks, transport, plant, machinery, farming, primary production or marine, the flag is given extra weight. It is still asking you to confirm eligibility, because fuel used only in light vehicles on public roads does not qualify.
Example/Use Case
Maria runs the books for a regional earthmoving contractor. Over the year the business records A$96,000 in an account called "Fuel - Diesel" for the diesel that runs its excavators and heavy trucks. There is no Fuel Tax Credit account anywhere in the chart of accounts, so no credits have ever been claimed. XBert flags this and prompts Maria to check the business's eligibility. Because the diesel is used in heavy vehicles and off-road machinery, the business is entitled to Fuel Tax Credits worth thousands of dollars a year. Maria sets up a Fuel Tax Credit account, claims the credits on the next BAS, and recovers what the business was missing.
Accounting software
This XBert runs on the chart of accounts and trial balance from Xero, MYOB and QuickBooks Online.
Which countries it supports
This XBert applies to Australia only. Fuel Tax Credits are an Australian Taxation Office (ATO) entitlement claimed through the Business Activity Statement (BAS).
Processes
Business area: Compliance. To act on this flag:
Review what the fuel is actually used for. Fuel Tax Credits generally apply to fuel used in heavy vehicles (over 4.5 tonnes) on public roads, and to fuel used off-road, in machinery, in agriculture or primary production, and in marine activities.
Confirm whether the business is eligible. Fuel used only in light vehicles travelling on public roads does not qualify.
If eligible, make sure the business is registered for Fuel Tax Credits with the ATO and is registered for GST.
Set up a Fuel Tax Credit account in the chart of accounts to record the credits going forward.
Use the ATO Fuel Tax Credit calculator to work out the amount, and claim it on the next Business Activity Statement.
Check whether credits were missed in earlier periods and, where allowed, claim the backdated entitlement.
Once you have confirmed the position and acted on it, mark the XBert as resolved.