Errors

When errors occur

An error occurs when is when the fuel tax credit amount you claimed on your business activity statement (BAS) was not correct at the time you lodged it.

If you realise you have made an error on an earlier BAS, you must correct it. You need to work out the amount that has been either:

• over claimed (you claimed more fuel tax credits than you were entitled to), or
• under claimed (you claimed less fuel tax credits than you were entitled to – for example, you used a lower rate than you were entitled to).

When you over claim, this is called a debit error – see how to correct a debit error. A debit error can occur if you: 

• made clerical errors – for example, double counting some fuel purchases
• over-calculated your eligible quantity of fuel
• used a higher fuel tax credit rate than you were entitled to
• claimed fuel tax credits for all the fuel you acquired, instead of only the fuel intended for use in an eligible activity.

When you under claim, this is called a credit error – see how to correct a credit error.

If you made multiple errors in a reporting period, you must treat each error individually when determining if it can be corrected and how to correct it.

You cannot correct a fuel tax credit error more than once.

For more information on correcting fuel tax errors, see LI 2023/33 Fuel Tax (Correcting Fuel Tax Errors) Determination 2023

Debit error

You can make a debit error if you make an error by overstating fuel tax credit claims. Examples of debit errors include:

• overstating fuel tax credit claims, for example, claiming more fuel than has been acquired, or incorrectly claiming for ineligible fuel or additives such as AdBlue
• overstating a decreasing fuel tax adjustment.

You can correct a debit error on a later BAS if the following conditions apply for each debit error:

• the debit error is within the debit error time limit
• the net sum of the debit errors is within the debit error value limit
• you are not subject to a compliance activity
• the error is not as a result of recklessness or intentional disregard of the law.

You may need to decrease your fuel tax credits in a later BAS if you made a debit error. To do this, include the dollar amount at label 7C (Fuel tax credit over claim) on a later BAS.

If you do not meet the above conditions, you must correct some or all of the error in the original period in which the error occurred – penalties and interest charges may apply. You can do this online via Online services for business, ATO online services – individuals and sole traders or contact us to get a revision form.

When claiming fuel tax credits, you need to apply the correct rates. Rates change regularly, so use the fuel tax credit calculator every time you make a claim.

Debit error time limit

Time limits apply for the correction of a debit error from the time the debit error occurred (not when it was discovered).

You can correct a debit error on a later BAS if you lodge it within the debit error time limit that corresponds with your current GST turnover in the table below. Otherwise you must correct the error amending the original period.

Table 1: Time limits for correcting debit errors

Current GST turnover	Debit error time limit
Less than $20 million	The debit error must be corrected on a BAS that is lodged within 18 months of the due date of the BAS in which the error was made.
$20 million or more	The debit error must be corrected on a BAS that is lodged within 12 months of the due date of the BAS in which the error was made.

For more information on GST turnover, see GSTR 2001/7 Goods and services tax: meaning of GST turnover, including the effect of section 188-25 on projected GST turnover.

 

Debit error value limit

You can correct a debit error on a later BAS if the net sum of the debit errors is within the debit error value limit that corresponds with your current GST turnover in the table below:

Table 2: Debit error value limit

Current GST turnover	Debit error value limit
Less than $20 million	Less than $12,500
$20 million to less than $100 million	Less than $25,000
$100 million to less than $500 million	Less than $50,000
$500 million to less than $1 billion	Less than $100,000
$1 billion and over	Less than $560,000

The net sum of the debit errors is the sum of one or more debit errors less the sum of any credit errors that results in an overall debit error. You can offset your credit errors against your debit errors for the purposes of working out whether you fall within the relevant debit error value limit.

Different guidelines apply for single and multiple errors:

• If you have a single debit error to correct on a later BAS, you can correct that error if it is within the relevant value limit. If the error exceeds the value limit you will need to amend the original period in which the error was made.
• If you have multiple debit errors to correct on a later BAS, you can correct the net sum of the debit errors up to the relevant debit error value limit. If the net sum exceeds the debit error, you will need to amend the original period on which the debit errors were made for the amounts that exceed the debit error value limit.
• If you have multiple debit and credit errors to correct on a later BAS, you can correct the net sum of the debit errors (debit errors less credit errors) up to the relevant value limit – you will need to amend the original periods on which the debit errors were made for the amounts exceeding the debit error value limit.

You cannot correct the amount that exceeded the debit error value limit on a subsequent BAS. You should correct the remaining debit error by amending the original period.

 Debit error value limits for GST groups, branches and joint ventures

For GST groups, branches and joint ventures, the debit error value limits apply to the entity that lodges the BAS and is entitled to claim fuel tax credits. That is, it applies to the representative member of the GST group (rather than each individual member) and the GST joint operator of a GST joint venture.

Credit errors

You can correct a credit error on a later BAS if both of the following conditions apply:

• The error is within the credit error time limits.
• You are not subject to a compliance activity.

Credit errors are not subject to value limits.

You may need to increase your fuel tax credits in a later BAS if you made a credit error. To do this, include the dollar amount of the error to your fuel tax credit amount for that period at label 7D (Fuel tax credit) on a later BAS.

Credit error time limits

Error occurring on or after 1 July 2012

If you made a credit error in a reporting period that started on or after 1 July 2012, you can correct the error on a BAS within the time limits and the 4–year period of review. That is, 4 years from the day after you lodge the BAS in which the error occurred.

If you are subject to compliance activity

A compliance activity is an examination of your fuel tax credit affairs undertaken by us and includes reviews, audits, verification checks, record-keeping reviews/audits and similar activities.

If you receive advice from us by phone or in writing about our intention to conduct a compliance activity, generally you cannot correct an error in a later BAS:

• that is the subject matter of that compliance activity
• arising in a reporting period that is subject to the compliance activity.

You should discuss that error with us. Once you discuss the error with us, we may notify you that you can correct the error in a later BAS.

If you find errors, it is in your best interest to voluntarily disclose them. If you tell us about your error, it will be taken into account when we consider penalties.

A compliance activity is completed when you receive a notice of assessment or notice of amended assessment, or when we tell you that the examination has been finalised.

 

Recklessness or intentional disregard of the law

You cannot correct a debit error if the error is due to recklessness or intentional disregard of the fuel tax law:

• Recklessness – is behaviour that falls significantly short of the standard of care expected of a reasonable person in the same circumstances. It is gross carelessness.
• Intentional disregard of the law – is something more than reckless disregard of, or indifference to, a tax law. The intention is a critical element. That is, a person must have understood the effect of the law and how it operates and makes a deliberate choice to ignore the law.