New figures reveal small business owners are anxious about tax time as the financial year draws to a close.
The American Express Tax Time Survey shows 91 per cent of new small business owners don’t have a thorough understanding of their yearly tax obligations, with 84 per cent unsure of what they can claim as a business expense.
Head of small business services at American Express, Jason Fryer, says concerns about understanding GST and the consequences of making a mistake are causing much worry.
“Setting up your own business can be like jumping into the unknown,” he says. “Our Tax Time Survey shows that completing the business tax return for the first time is often fraught with anxiety.
“The research shows that almost all new business owners wonder at some stage if they have complied with the latest tax legislation and whether they will fall foul of the tax office if they make a mistake.”
More than 500 Australian businesses were surveyed for the report by Galaxy Research, which also found 74 per cent of operators find completing their business activity statements a burden. The results show tax related issues are as stressful for small business owners as cash flow management.
“The American Express research reveals considerable uncertainty among small business owners about tax reporting and what they can and can’t claim, which contributes to negative feelings about completing tax returns,” says taxation expert and author Adrian Raftery.
“In fact, the two most common questions I am asked by small business owners at tax time are, ‘what is the likelihood of my business being audited?’ and ‘who are the ATO targeting this year?’ – demonstrating the level of concern among business owners.”
Tips offered by American Express to relieve taxation stress include keeping on top of receipts and using a specific business card to keep personal and office spending organised.
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