A third of respondents indicated that EOFY impacts their business as it takes away valuable time needed to focus on the growth of the business.
A week out from the end of the 2016 financial year, new research we have conducted reveals that more than one in five Australian small businesses have admitted to lodging their tax returns late, with 10% saying they simply ‘ran out of time’.
In addition, the survey* of 503 Australian small-business owners found that 40% of them are unsure of the business deductions they are able to claim, showing a lack of financial literacy among some business owners.
The second annual Xero EOFY Survey provides a snapshot of Australian small-business owners’ attitudes to the end of financial year period, revealing that many find the time stressful and difficult to navigate.
The research also reveals that:
The research echoes what we have been hearing from Australian small-business owners for a long time now. Small businesses are working hard but are time poor, so sometimes they struggle to keep up. By planning ahead where possible and utilising technology tools like the cloud, small businesses will be able to save valuable time during EOFY.
When asked what could be improved, half of Australia’s small-business owners indicated that easier government compliance requirements would make tax time less stressful, over a third – 38% – suggested an easier way of doing taxes, and a fifth – 23% – would like less paperwork to complete.
More than half – 54% – of Australian small-business owners either directly manage their tax time obligations, or work with their accountant to manage them. Xero Tax offers an easy solution for business owners or accountants and has experienced unprecedented growth since its official release last June.
Last year, the 2015 Xero EOFY Survey found nearly 60% of small businesses were planning to take advantage of the immediate asset deduction. However, this year’s research revealed that only 46% had done so to date.
This year’s federal budget did provide assistance to small and medium businesses, however the research shows that small businesses are still being caught up in red tape. The government could do more to make compliance easier for Australian small businesses, which ultimately, will save them the time they need to invest back into their business.
Trent Innes, Managing Director, Xero Australia
*Xero EOFY survey, May 2016. The survey was conducted by PureProfile and consisted of 503 Australian respondents who own their own small business