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15: Administered - non-financial assets

2021

2020

$'m

$'m

Note 15A: Receivables

Direct tax

Individuals

31,265

29,854

Company

14,282

12,829

Superannuation

618

537

Resources rent tax

156

211

Fringe benefits tax

137

197

Total direct tax

46,458

43,628

Indirect tax

Goods and services tax

12,241

13,314

Excise duty

154

182

Wine equalisation tax

65

100

Luxury car tax

34

81

Total indirect tax

12,494

13,677

Other tax

Superannuation guarantee charge

2,952

2,453

Self managed superannuation fund levy

69

59

Other

64

39

Total other tax

3,085

2,551

Non-taxation

Fines

243

236

JobKeeper receivables1

121

-

Unclaimed superannuation monies

8

1

Foreign investment review board infringements

5

4

Total non-taxation

377

241

Total receivables (gross)

62,414

60,097

Less: Impairment allowance

(26,515)

(20,831)

Allowance for credit amendments

(5,934)

(4,256)

Total receivables (net)

29,965

35,010

Note 15B: Accrued revenue

Direct tax

Fringe benefit tax

901

956

Resources rent tax

310

154

Total direct tax

1,211

1,110

Indirect tax

Goods and services tax

11,654

9,780

Excise duty

318

252

Wine equalisation tax

105

93

Luxury car tax

104

71

Total indirect tax

12,181

10,196

Other revenue

Major bank levy

374

421

Unclaimed superannuation monies

397

525

Self managed superannuation fund levy

44

50

Total other revenue

815

996

Total accrued revenue

14,207

12,302

1.JobKeeper receivables relate to overpaid JobKeeper payments yet to be recovered.

Accounting policy

Cash

Cash is carried at net fair value and is a financial instrument.

Receivables

ATO receivables are non-financial assets recoverable under law.

Collectability of receivables is reviewed on an ongoing basis. Where estimation is used, it represents the best estimate as at the reporting date, however inherent risks and uncertainties exist in the estimation process.

Debts which are irrecoverable at law or uneconomic to pursue are written off. However this does not preclude the Commissioner from re-raising these debts if information subsequently becomes available which indicates that recoverability action may be viable.

Parallel liabilities

Where a company fails to remit withholding tax, GST or superannuation guarantee amounts, the Commissioner is authorised to serve notices requiring payment of estimated and outstanding amounts on the company and all associated Directors. These are called parallel liabilities and are not included in receivables or revenue. Similarly, duplications arising from debts raised under alternative provisions of the law are excluded.

Impairment on taxation receivables

An impairment allowance is created when there is evidence that the ATO will not be able to collect all of the amounts due.

A threshold is applied to determine whether the impairment allowance is calculated manually or using a statistical model.

Assessment of the collectability of receivables includes consideration of a taxpayer’s compliance and lodgement history, the existence of a dispute over a receivable, the taxpayer’s capacity to pay, and management judgement.

Impairment losses are recognised as an administered expense.

Administered receivables are not financial instruments as they arise from statutory charges. The impairment of statutory receivables is made under AASB 136 Impairment of Assets.

An impairment allowance is estimated using historical data and is informed by expert advice. In 2020-21, total administered receivables remain higher than prior years as a result of the continued effects of COVID. This has resulted in continued heightened uncertainty surrounding the expected value and timing of repayments of administered receivables.

During 2020-21 the ATO made several updates to the model for estimating the impairment on small debts. These changes were made to better incorporate emerging trends and patterns, enhance alignment with business practices and strengthen review and monitoring steps. The effect of this change in accounting estimate at 30 June 2021 is an increase to the impairment allowance of $4,673 million and a corresponding increase to the impairment of receivables expense. It is impracticable to estimate the effect of this change on future reporting periods.

Structural shifts in repayment behaviour could cause material future changes to the impairment allowance and will continue to be monitored using the revised model.

Allowance for credit amendments

Recognised in relation to disputed assessments in accordance with Note 14.

Accrued revenues

Accrued revenues include revenue estimates made on an ETM basis and interest charges in accordance with Note 14.

Other securities

In some instances, the ATO will enter into an agreement with a taxpayer to hold a security over a tax debt. These securities are not recorded in the financial statements as assets because the primary cash generating asset is the debt rather than the security over the debt.