Fuel costs have been squeezing Australian small businesses for months. If you operate in trades, transport, delivery, or agriculture in Brisbane or the Moreton Bay region, you have likely felt it in your margins, your cash flow, and your bottom line.
The Australian Government and the ATO introduced temporary fuel relief measures from 1 April 2026 to 30 June 2026, including updated fuel tax credit rates and a dedicated ATO fuel response payment plan for eligible businesses affected by high fuel costs. If you have not reviewed your position yet, there is a limited window to act.
Not sure whether these measures apply to your business? Contact the team at Rhythm Financial for a quick, obligation-free conversation.
What is the ATO fuel response?
The ATO fuel response is the ATO’s temporary support package for eligible businesses affected by high fuel costs. It includes updated fuel tax credit rates and a tailored payment-plan pathway for eligible ABN holders.
The ATO says the fuel response payment plan is available by application until 30 June 2026.
Read the full ATO announcement here, or keep on reading for a summarised version most relevant to small businesses.
1. A temporary fuel excise reduction
The government has reduced fuel excise by 32 cents per litre for a three-month period beginning 30 March 2026, with the relief window closing approximately 30 June 2026. This reduction applies at the point of sale, meaning eligible fuel purchased during this period reflects the lower excise rate.
Once the window closes, excise rates revert to their standard levels. That makes the next few weeks a meaningful opportunity for businesses with significant fuel spend.
2. Changes to fuel tax credit rates
Fuel tax credit rates changed from 1 April 2026 following the temporary reduction in fuel excise. The ATO says businesses need to use the March BAS rates for fuel acquired before 1 April 2026 and the new rates for April BAS periods from 1 April 2026.
From 1 April to 30 June 2026, the heavy vehicle road user charge is set to zero. For fuel used in heavy vehicles on public roads, businesses can claim fuel tax credits equal to the excise duty payable on that fuel during the temporary arrangement.
The key point is that fuel tax credit rates are linked to the excise duty payable on fuel, so the amount you can claim depends on the fuel type, how it is used, and the BAS period involved.
On-road and off-road use
Fuel tax credits work differently depending on how the fuel is used. Off-road use such as machinery, generators, pumps, and stationary equipment is more likely to attract a claim, while fuel used in heavy vehicles on public roads is governed by the temporary road user charge rules during this period.
For tradies driving between job sites, the entitlement may be different from fuel used in equipment on-site, so it is worth separating on-road and off-road use carefully.
If your business uses both, we can help you allocate claims correctly and avoid over- or under-claiming.
3. The ATO fuel response payment plan
This is the measure most likely to make a meaningful difference for businesses under cash flow pressure right now.
The ATO fuel response payment plan is a temporary arrangement for eligible taxpayers who are under financial pressure because of high fuel costs. It allows a no-upfront-payment plan over 36 equal monthly instalments, and the ATO may remit general interest charge accrued from the date of application to the third monthly instalment if you keep the plan and lodgements up to date.
To be eligible, you must be an ABN holder and meet four criteria: you must have increased business operating costs directly or indirectly linked to high fuel costs, have a new tax debt or be unable to service an existing debt, be able to show reduced capacity to pay because of fuel prices, and have lodgements up to date within three months of the plan being set up.
This is not the same as ordinary cash flow pressure. The ATO specifically says the reduced capacity to pay must be attributable to high fuel prices rather than a general downturn in business.
Who is this relief designed for?
This relief is most relevant for businesses with material fuel exposure, including transport and logistics operators, trades businesses with fleets or equipment, agriculture and rural operations, and any business whose transport or supply-chain costs have risen because of fuel prices.
It may also suit businesses that have a tax debt but were otherwise able to meet obligations before fuel costs increased.
What could this mean in dollar terms?
To give you a practical sense of scale: if your business uses 1,000 litres of eligible off-road fuel per month, the temporary rate change could materially affect your fuel tax credit claim over the three-month period. The exact dollar impact depends on the fuel type, use category, and the BAS period, so this should be calculated case by case.
For fleet operators, agricultural businesses, or any operation using several thousand litres per month, the figure compounds quickly.
This is an illustrative calculation. The actual impact on your business depends on how your fuel is used, which rate category applies, and your total fuel volumes. Your accountant can help you calculate your specific position accurately.
Your immediate action checklist
If you use fuel regularly in your business, you can work through these steps now solo or give us a call and we can run you through it:
- Check whether your fuel use is on-road, off-road, or both.
- Confirm you are using the correct ATO fuel tax credit rates for the relevant BAS period.
- Review whether any BAS lodgements need amendment if you used an outdated rate.
- If fuel costs have contributed to tax debt or cash flow stress, assess whether you meet the ATO fuel response payment plan criteria.
- Make sure your lodgements are up to date if you want to be considered for the payment plan.
PAYG instalments: an often-missed opportunity
If your profit has fallen because of higher fuel costs, you may also want to review your PAYG instalments. A downward variation can improve short-term cash flow if your current instalments no longer reflect expected income.
Many business owners do not realise this option exists outside of the standard annual tax return process. It is worth reviewing if your current instalments no longer reflect your trading reality.
Act quickly to seize the most of this opportunity
If you are unsure whether the ATO fuel response applies to your situation, or you want help working out fuel tax credits, checking an amended BAS, or assessing eligibility for the fuel response payment plan, the team at Rhythm Financial can help.
Book a conversation with Rhythm Financial today. We work with trades, transport, agricultural, and small business operators across Brisbane and the Moreton Bay region, and we can help you understand exactly where you stand before the deadline passes.
Small business fuel relief Australia 2026 FAQs
I drive to job sites every day. Can I claim fuel tax credits?
Fuel used for public-road travel is treated differently from off-road use, and the entitlement depends on the vehicle, fuel type, and relevant period. If most of your fuel use is for travel between sites, your entitlement may be limited, but off-road equipment use can still qualify.
What if I already lodged my BAS with the wrong rate?
If you used an outdated rate, you may need to amend your BAS. The ATO says different rates apply before and from 1 April 2026, so it is important to check which rate applies to the period you lodged.
How do I know if I qualify for the ATO fuel response payment plan?
You must be an ABN holder and show that high fuel costs have directly or indirectly increased your business operating costs, created or worsened tax debt, reduced your capacity to pay, and that your lodgements are up to date within three months of the plan being set up.
Important to note: This article is general in nature and does not constitute tax or financial advice. It reflects publicly available ATO information as at the date of publication, and rates, eligibility, and support settings may change. Please verify current details with the ATO and speak with a qualified accountant before acting on this information.
