A recent survey of Australian small business owners has found many would rather have dinner with their mother-in-law than face preparing their taxes for the end of financial year.
The survey conducted by cloud accounting solution, Xero, canvassed 500 Aussie small business owners. 69 per cent of participants said they would choose to share a meal with their partner’s parents over forganising their taxes.
Preparing their taxes was so undesirable, in fact, that 65 per cent would rather work on the weekend instead, whilst a further 58 per cent found doing household chores preferable.
So why are small businesses owners so adverse to doing their taxes? According to Matthew Prouse, Head of Industry at Xero Australia, tax time can be intimidating for small business owners.
“When you aren’t a finance expert (and most small businesses aren’t), decoding tax jargon to understand business obligations can feel overwhelming. A shocking 42% of small businesses told us they don’t understand the terms used in tax returns and ATO documents — for these owners, going at it alone is like tackling a new language, only harder as the rules are constantly evolving. 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.”
Over half of respondents found tax time one of the most stressful times of the year with new business owners particularly prone to stress. Despite this, one-third of business owners still decided to go it alone and do their own tax return.
Prouse suggested failing to seek help was the first mistake many owners made at tax time.
“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 the 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,” Prouse said