Rising Fuel Costs Are Squeezing Business Cash Flow

Fuel, freight and transport expenses continue to trend upward, creating growing cash flow challenges for businesses across Australia. While transport and logistics operators are experiencing the most immediate impact, the effects are flowing through many other sectors, including trades, service industries, agriculture, retail and professional firms.

Recognising the strain higher operating costs are placing on businesses, the ATO has introduced temporary relief measures alongside its existing support options for businesses under financial pressure.

If fuel related expenses are starting to affect your ability to meet tax obligations, it is important to understand what assistance may be available.

Temporary ATO Fuel Response Payment Plan

The ATO has introduced the Fuel Response Payment Plan to support eligible businesses experiencing cash flow pressure linked to rising fuel costs.

Subject to eligibility, this initiative may allow businesses to:

• Enter a payment arrangement with no upfront payment required

• Spread repayment of tax liabilities over up to 36 months

• Seek reduction or remission of General Interest Charges (GIC) where eligibility criteria are met

This support is temporary and applications are available until 30 June 2026.

Who Is Eligible?

The Fuel Response Payment Plan is aimed at businesses that meet all of the following criteria:

• Hold a valid Australian Business Number (ABN)

• Have experienced increased costs as a result of higher fuel prices, either directly or indirectly through freight, transport or supply chain expenses

• Have incurred a new tax debt or are finding it difficult to manage an existing one

• Can demonstrate that fuel related cost increases are the primary cause of cash flow pressure, rather than broader trading conditions

Each application is considered on its own merits, and supporting information may be required as part of the assessment process.

PAYG Instalments May Be Varied

Businesses experiencing reduced profitability due to rising operating costs may also consider varying their PAYG instalments.

Where income is expected to be lower than originally forecast, the ATO may allow instalments to be reduced. This can provide short term cash flow relief while cost pressures remain elevated.

Care should be taken when varying instalments, as incorrect or unreasonable variations may result in penalties or interest being applied.

How We Can Assist

If increasing fuel, freight or transport costs are beginning to impact your business finances, early action is key.

We can assist by:

• Reviewing your circumstances and assessing eligibility for ATO support measures

• Assisting with applications for the Fuel Response Payment Plan

• Reviewing and varying PAYG instalments where appropriate

• Developing a practical strategy to manage tax obligations and cash flow

Please contact us to discuss your situation and ensure you are accessing all available support options.