Diesel up around 7 per cent in a week: what sole traders can do

Fuel got more expensive again last week, and the jump was sharper for diesel than for petrol. In its latest weekly fuel price monitoring update, the competition regulator, the ACCC, reported that on 23 September, daily average retail petrol prices across the five largest cities were 237.1 cents a litre, an increase of 12.9 cents, or around 6 per cent, on the week before. Diesel was 286.8 cents a litre, up 18.9 cents, or around 7 per cent. Across the more than 190 regional locations the ACCC monitors, the aggregate figures were 242.7 cents for petrol and 288.9 cents for diesel. The ACCC put the movement down to international refined fuel benchmark prices staying high as conflict continued in the Middle East. If your work involves a ute, a van or a car, that is a direct hit to the margin on every job you drove to this week.

The longer view matters more than any single week. The same report puts average retail diesel across the five largest cities 110.2 cents a litre above where it sat on 20 February, about a week before the conflict escalated. Petrol is 66.2 cents higher over that same stretch. A cost line that has moved that far is worth re-checking rather than carrying on with a figure you set earlier in the year.

General information, not tax advice. The ATO is the authority - see ato.gov.au or ask a registered tax or BAS agent.

Work out what fuel is actually costing you

Start with a number instead of a feeling. Add up what you spent on fuel over the last four weeks, then divide it by the number of jobs you travelled to. That gives you a rough fuel cost per job, which is the figure you can hold against whatever you currently charge for travel or callouts.

Do the same sum for the four weeks before that if you have the records. The gap between the two is the part of your margin that moved while you were out working.

Check which vehicle expense method suits you

Sole traders claiming car expenses generally pick between two methods, both set out on the ATO’s deductions for motor vehicle expenses pages.

The cents per kilometre method uses one rate per business kilometre, set for each income year, and that single rate is meant to cover running costs and depreciation together. It is capped at 5,000 business kilometres per car per income year. A logbook is not required, but the ATO still expects you to be able to show how you worked out the kilometres, through diary or calendar records.

The logbook method claims a business-use percentage of your actual costs, and it needs a logbook kept for at least 12 continuous weeks that is representative of your travel for the year.

Here is why that matters this week. The cents per kilometre rate does not move when the pump price moves, but actual costs do. If your fuel bill has climbed and you drive well past 5,000 business kilometres, it may be worth checking whether the logbook method now produces a better result than the one you used last year. Twelve continuous weeks started now still lands inside this income year.

Keep the records that make the claim stick

If you are registered for GST, fuel is a purchase you may be able to claim a GST credit on. The ATO’s page on when you can claim a GST credit sets out two points worth remembering at the bowser: you need a tax invoice for a purchase costing more than $82.50 including GST, and where something is used for both business and private purposes, only the business portion can be claimed.

Fuel dockets are printed on thermal paper, and thermal paper fades. A glovebox full of blank slips in April is a claim you cannot substantiate. Photographing each receipt when you get it, and attaching it to the expense record then and there, takes a few seconds and removes the problem.

If you run a heavy vehicle or off-road equipment

Fuel tax credits sit apart from both deductions and GST credits. They cover eligible fuel used in heavy vehicles with a gross vehicle mass greater than 4.5 tonnes travelling on public roads, along with fuel used off road in machinery and equipment.

The rates change, sometimes partway through a year. The temporary excise reduction that began in March at 32 cents a litre was halved to 16 cents in July and ended in early August, and fuel tax credit rates moved along with it. Checking the current table on the ATO’s fuel tax credit rates page beats reusing a figure from an earlier quarter.

Look at your travel charges before your next quote

A fuel price move only becomes a loss if your pricing stays still. Three things could be worth a look: whether your callout fee still covers the trip at current prices, whether long-distance jobs need a separate travel charge rather than being folded into an hourly rate, and how long your quotes stay open, because a quote written on a February fuel price and accepted now is a job priced in the wrong year.

None of that means raising prices across the board. It means knowing which jobs are still profitable before agreeing to the next one.

Apsis can take the record-keeping half of this off your plate. An expense can carry a photo of the receipt, so a faded docket is never the only copy of a fuel claim. If your travel charge does need to change, the default line-item rate that pre-fills your quotes and invoices is one setting to update rather than a number to remember on every new job. On the paid plan, the tax module adds a GST and BAS view and an income tax estimate, which helps when a cost line has shifted this far inside one quarter.