With the end of financial year looming, Xero has released new data that shows most small-business owners would rather have dinner with their in-laws than get down to deal with what they have to do at tax time.
The survey of 500 Australian small-business owners found that when given a choice, the vast majority (69 per cent) would choose to share a meal with their partner’s parents over facing their taxes. In fact, most believe working on the weekend (65 per cent) and cleaning the entire house (58 per cent) is more desirable than their end of financial year obligations.
As to the reason why, many owners said they didn’t think it needed to be done immediately (48 per cent) while others (19 per cent) cite being busy at tax time due to the season. Some 17 per cent admit to holding off because they hate doing it. On the flip side, small-business owners would still prefer to do their taxes than sit in traffic or take a maths exam.
“Tax time can be intimidating for anyone but for small businesses,” said Matthew Prouse, Head of Industry at Xero Australia. “When you aren’t a finance expert (and most small businesses aren’t), decoding tax jargon to understand business obligations can feel overwhelming…However, the more a business procrastinates from taking a good hard look at the numbers, the more challenging tax time can become – and the more surprising the final result often is.”
More than half (52 per cent) of small-business owners see tax time as one of the most stressful times of the year and first timers are most likely to be hard hit, with one in three (34 per cent) respondents believing their first annual tax time experience was one of the most stressful times they’ve encountered running their business.
Despite the stresses of tax time, many small-business owners still choose to go it alone each year, with more than one in three (37 per cent) admitting they do all the work themselves with no external support.
Prouse noted, “A critical mistake that business owners make at tax time is burying their head in the sand and trying to do it all alone. Heading into end of financial year blind, without a solid understanding of regulation and obligations can be a recipe for disaster and lead to serious errors and potential fines.”
An overwhelming majority (98 per cent) of small-business owners said seeking support through a qualified accountant or tax professional made tax time much less stressful for them.