High fuel costs are putting real pressure on Australian businesses, particularly those in transport, logistics, agriculture, and other fuel-dependent sectors. In response to the National Fuel Security Plan announced by the Australian Government on 30 March 2026, the ATO has introduced a targeted package of support measures for businesses that are genuinely struggling to meet their tax payment obligations because of fuel costs.
This support is temporary. According to the ATO’s fuel response page, the support package runs for three months, from 1 April 2026 to 30 June 2026. If you believe your business is eligible, you need to act before that window closes.
This article explains what support is available, who can access it, how to apply, and what conditions must be met to keep a payment plan in place and have interest remitted.
What Is the ATO Fuel Response?
On 30 March 2026, the Australian Government announced the National Fuel Security Plan, a package of measures designed to address the impact of high fuel prices on individuals and businesses. As part of this plan, the ATO was tasked with administering several temporary tax measures, including a 32 cents per litre reduction in fuel excise and changes to fuel tax credit rates.
For businesses specifically, the ATO has also introduced a targeted payment support program for those that cannot meet their current tax obligations due to the increased cost of fuel. This program provides three types of relief, each with its own conditions and application process.
The ATO has stated that during this period, its compliance approach will be guided by careful consideration of taxpayers’ circumstances and the current environment. You can read the full detail on the ATO’s media release on the fuel response.
What Support Is Available? The Three Types of Relief
| Support type | What it means for you | Condition to qualify |
|---|---|---|
| Flexible payment plan | Pay your tax debt in up to 36 equal monthly instalments, with no upfront payment required | Must be unable to meet current payment obligations due to high fuel costs |
| GIC remission | Interest that has built up from your application date to your third monthly instalment can be remitted by the ATO | Must pay all 3 monthly instalments and bring lodgments up to date within 3 months |
| Additional GIC and penalty remission | High fuel costs treated as a relevant factor in requests for further remission of interest and penalties | Apply through ATO online services and demonstrate impact of fuel costs |
| PAYG instalment variation | Reduce the amount of tax you prepay quarterly if your taxable income has fallen due to fuel costs | Apply via activity statement or contact the ATO through online services |
1. Flexible payment plan arrangements
The most significant element of the fuel response is streamlined access to a new temporary payment plan. Unlike a standard ATO payment plan, this arrangement includes:
- Longer payment terms: You can repay your tax debt in up to 36 equal monthly instalments.
- No upfront payment required: Standard payment plans often require a payment upon setup. The fuel response plan waives this.
- Direct debit arrangement: Repayment is set up via direct debit from an Australian bank account, credit card (Visa, Mastercard, or Amex), or debit card. Note that a credit card surcharge may apply.
- GIC remission included: If you meet the conditions (see below), the ATO will remit general interest charge that has accrued from the time of your application through to the third monthly instalment.
You can read the full conditions of the ATO fuel response payment plan on the ATO’s website.
2. Remission of the General Interest Charge (GIC) and other penalties
The General Interest Charge (GIC) is the interest the ATO applies to unpaid tax debts. It compounds daily, which means the longer a debt remains unpaid, the more interest accumulates. Under the fuel response program, the ATO will:
- Automatically remit GIC accrued from the date of your payment plan application through to the date of the third monthly instalment, provided the conditions are met.
- Treat high fuel costs as a relevant factor in any additional or separate requests for remission of GIC and other penalties.
This does not mean all GIC is waived automatically. The remission applies only to the specific period described above and only if you meet the payment and lodgment conditions. You can read more about how GIC is calculated and remitted on the ATO’s website.
| Important: GIC that accrued before 1 July 2025
If you claimed a deduction for GIC incurred before 1 July 2025 and the ATO subsequently remits that GIC, you must report the remitted amount as interest income in your tax return for the year the remission is granted. GIC incurred on or after 1 July 2025 is no longer deductible, so no corresponding income reporting is required if that GIC is later remitted. |
3. Varying PAYG instalments
Pay as you go (PAYG) instalments are amounts you prepay throughout the year toward your expected income tax liability. If high fuel costs have reduced your taxable income, you may be paying more than you will actually owe at year end. The ATO is supporting eligible businesses to vary their PAYG instalment amount downward to better reflect their current expected income.
According to the ATO’s PAYG instalment variation guidance, you can vary your instalments if your total instalments for the year will be more or less than your expected tax. The varied amount or rate then applies to all remaining instalments for that income year, or until you make another variation.
There is an important caution here. If you underestimate your instalment amount, you may face GIC on the difference between your varied instalments and the amount you actually owe at year end. The ATO expects a genuine attempt to estimate your liability correctly. Where possible, seek advice before varying your instalments to make sure your estimate is reasonable.
Who Is Eligible for the ATO Fuel Response Payment Plan?
The ATO has not published a detailed list of industry codes or specific business types that qualify. The program is open to businesses that can demonstrate they are genuinely unable to meet their tax payment obligations as a result of high fuel costs. The following conditions apply to enter and maintain the plan:
- The business must be unable to meet current tax payment obligations due to the impact of high fuel costs
- The business must not currently be subject to ATO legal action in relation to outstanding debt (businesses in this situation may not be eligible)
- The business must be able to enter a direct debit arrangement
- The business must be able to repay its total debt across a maximum of 36 equal monthly instalments
To keep the payment plan in place and access GIC remission, two ongoing conditions must be met:
- Pay all three monthly instalments as agreed under the payment plan.
- Bring all outstanding lodgments up to date within three months of the payment plan being set up. The ATO may cancel the payment plan if lodgments remain outstanding after this period, and GIC remission will not proceed without up-to-date lodgments.
| Priority obligations: employees come first
Regardless of any payment plan arrangement with the ATO, your obligations to your employees must continue. The ATO specifically notes that businesses should continue to pay employee wages and ensure employee super guarantee entitlements are paid as a priority. You should also continue paying your creditors so they can meet their own employee obligations. |
How to Apply: Step-by-Step
Applications are made through ATO Online Services for Business. Sole traders should use Online Services for Individuals. If a registered tax or BAS agent is applying on your behalf, you will need to confirm they have authority to act for you.
| Step | What to do |
|---|---|
| 1 | Log in to ATO Online Services for Business (or Online Services for Individuals if you are a sole trader) |
| 2 | From the Home page, locate the Fuel response alert and select Check options |
| 3 | Assess your eligibility and notify the ATO of your interest in a tailored payment plan |
| 4 | Indicate whether you intend to vary your PAYG instalments as part of the application |
| 5 | Save and print a copy of your submission for your records |
| 6 | The ATO will contact you with more information and next steps (submitting the form does not confirm a payment arrangement) |
| Note: Submitting the application form does not confirm a payment arrangement
Completing the online notification form means you have expressed interest. The ATO will contact you or your representative with more information and the next steps. Do not stop making payments or assume your debt is deferred until the ATO confirms your arrangement in writing. |
What About Businesses Already on a Standard Payment Plan?
If your business already has a standard ATO payment plan in place and is experiencing difficulty because of fuel costs, you can still apply for the fuel response payment plan as a separate or replacement arrangement. The ATO encourages affected businesses to reach out through Online Services or through their registered tax agent.
For businesses that do not qualify for the fuel response plan but are still experiencing financial difficulty, the ATO’s existing support options remain available. These include standard payment plans, lodgment and payment deferrals, and penalty and interest remission on a case-by-case basis. A full overview of ongoing support options is available on the ATO’s tax support for businesses page.
Frequently Asked Questions
Does the fuel response payment plan cover all types of tax debt?
The ATO’s guidance does not restrict the plan to specific tax types. It is designed for businesses unable to meet general payment obligations due to fuel costs. If you are unsure whether your specific debt is covered, contact the ATO or speak to your tax agent before applying.
Will applying affect my credit rating or ATO compliance record?
Applying for a payment plan is a normal and supported process. It does not in itself affect your credit rating. The ATO’s compliance approach during this period is designed to be supportive of businesses making genuine attempts to meet their obligations.
What if I miss an instalment?
Missing an instalment can put your payment plan at risk of cancellation. If the plan is cancelled, any GIC that would have been remitted may no longer be waived. Contact the ATO or your tax agent as soon as possible if you anticipate difficulty meeting an instalment.
Can my accountant or tax agent apply on my behalf?
Yes. A registered tax or BAS agent can submit the application on your behalf using the agent online services portal. You need to ensure they have the appropriate authority to act on your account before they do so.
What happens after 30 June 2026?
The ATO fuel response payment plan is only available by application until 30 June 2026. The ATO has stated it will continue to assess the situation and update its support options if the program is extended or changed beyond that date. You can monitor updates at the ATO fuel response page.
Act Now: The Window Closes on 30 June 2026
If your business is eligible for this support, there is very little time left. The application window closes at the end of June 2026, and the ATO has made clear that the program will not automatically continue beyond that date.
The key actions to take before the deadline are:
- Review whether your business qualifies based on the conditions outlined above.
- Bring all outstanding lodgments up to date so you can access GIC remission if your plan is approved.
- Log in to ATO Online Services and check the Fuel response alert on your home page.
- Consider whether to vary your PAYG instalments if your taxable income has fallen.
- Speak to your accountant or tax agent before applying, particularly if you are unsure about how a payment plan will affect your broader financial position.
How JMB Consultants Can Help
Navigating ATO payment arrangements and interest remission requests requires careful attention to detail. A missed lodgment, an incorrect instalment amount, or a misunderstanding of the conditions can result in your plan being cancelled or your GIC remission being denied.
At JMB Consultants, we work with Australian businesses to manage their ATO obligations, review their PAYG instalment amounts, and prepare and submit requests for payment plans and penalty remission. If you think your business may qualify for the fuel response support package, we can help you assess your position and submit an accurate application before the 30 June deadline.
Contact JMB Consultants to speak with an accountant about your options before the window closes.
Disclaimer: This article is intended as general information only and does not constitute legal or financial advice. The details summarised here are based on ATO guidance and media releases current as of May 2026. Tax support measures can change. You should seek professional advice tailored to your specific circumstances before taking action.