Poor recordkeeping, so fuel tax credit claims refused
The AAT has held that a 25% administrative penalty concerning disallowed claims for fuel tax credits was appropriately levied on a taxpayer.
The taxpayer was the corporate trustee of a family trust, and ran farms and a construction and earthmoving equipment business. It claimed fuel tax credits under the Fuel Tax Act 2006 in respect of fuel acquired for use in the various machines it operated in the course of its business in the period November 2006 to April 2010. During the period under review, the taxpayer provided machinery for use on a number of different construction projects, including major roadworks being undertaken by the local council. The Commissioner disallowed the claims following an audit in 2010. The Commissioner said the records maintained by the taxpayer did not accurately describe the amount of fuel acquired or used by the taxpayer, or adequately describe the purpose for which the fuel was used. The Commissioner said there was a revenue shortfall as a result of the claims being disallowed and he imposed an administrative penalty at the rate of 25%.
The AAT said the taxpayer acknowledged there were problems with its recordkeeping, although the taxpayer said the difficulties were caused by employee delinquency. It argued its true entitlements were actually much greater than the amount claimed because the claims omitted details about the fuel used by a number of items of machinery.
The AAT said fuel use estimates by the taxpayer were not sufficiently tight to offer a meaningful guide as to how much fuel was consumed, “let alone the purposes for which the machinery was used”. It said it was not persuaded that the business operator’s estimates were sufficiently precise or reliable for the AAT to accept that the taxpayer’s claims to fuel tax credits were right, or more nearly right than the Commissioner’s assessment.
The AAT said the taxpayer’s records “were a mess”. The taxpayer’s business was not a small one and it turned over millions of dollars in revenue each year. The fuel tax credit entitlements were potentially very large. The AAT said the business had professional advisers to assist it in making the fuel tax credit claims. “It should have done better.” The AAT concluded that the administrative penalty was appropriately levied at the rate of 25%.
After reviewing the matter, the AAT said it was satisfied that the objection decisions under review had to be affirmed.
Re Taxpayer and FCT [2013] AATA 448, www.austlii.edu.au/au/cases/cth/AATA/2013/448.html.
