A tax policy specialist has slammed changes that will require small businesses and not-for-profits to submit 56 reports to the tax office every year, warning the workload will drive away volunteers and even penalise the local school canteen.
Since the start of this financial year, the Australian Taxation Office has required employers with 20 or more workers to file reports through "Single Touch Payroll" - a system that sends tax and superannuation information to the tax office each time businesses run their payroll software.
From July 1, employers with 19 or fewer employees will also be required to use the system.
Canberra man Ken Mansell, a tax policy specialist who previously worked at the federal Treasury, said the system worked perfectly for "the big end of town".
But he warned it would unfairly punish not-for-profits and other entities so small they didn't have payroll systems.
Mr Mansell is now a stay-at-home father and acts as the volunteer treasurer for the Curtin Primary School canteen, which employs a part-time manager for four hours per school day.
Because of the taxation changes, the canteen will soon need to file reports each week detailing the part-time manager's pay. It will also have to lodge quarterly business activity statements.
An Australian Taxation Office spokeswoman said "micro-employers" - entities with between one and four employees - would be allowed to report quarterly for the first two years if their reports were prepared by a registered tax or business activity statement agent.
But Mr Mansell said this would defeat the purpose of having a volunteer treasurer and create unnecessary costs for small not-for-profits and businesses.
"The whole reason we have volunteer treasurers is that we could outsource it, but it's going to cost money and we don't want the local school canteen to put prices up for the kids to cover the costs of an accountant," he said.
"For having one part-time employee, you have to submit 56 forms [a year].
"It's one of those situations where it makes perfect sense for the big end of town, but I don't think a lot of small entities know this is coming."
In an email seen by the Sunday Canberra Times, the tax office told Mr Mansell that "your scenario of a not-for-profit entity with one part-time employee does not meet the criteria to give you an exemption from [Single Touch Payroll] reporting".
Mr Mansell described this as "crazy stuff".
"No one will ever volunteer to be the treasurer of a very small not-for-profit entity anymore," he said.
The Australian Taxation Office spokeswoman said while the changes took effect from July 1, employers with 19 or fewer workers would be given until September 30 this year to start reporting and still be on time.
She said there were "a number of low-cost and free payroll solutions" available to meet the needs of different employers.
For entities with between one and four employees that did not already have payroll or accounting systems, there were solutions listed on the tax office website and available for $10 per month or less.
"The ATO worked very closely with the market to ensure that a range of options was available that wouldn't put an additional time or cost burden on small employers who are already very busy," the spokeswoman said.
"This of course includes employers who are not-for-profits."
The spokeswoman said the tax office would not look to exclude every small not-for-profit employer from reporting weekly "as a blanket class", but it would consider granting exemptions on a case-by-case basis.
Employers who needed more time to get ready could also request a deferral.
"There will be no penalties for mistakes, missed or late reports for the first year," the spokeswoman said.
"We are working with employers to help them get it right."
