Over 80 per cent of SME owners find tax reporting stressful: AMEX survey

With the end of the 2012 financial year fast approaching, many small business owners are no doubt preparing their income tax statement and determining what deductions they can claim. However, many are confused over what tax concessions they are able to claim, according to a new American Express survey of 1,000 SME owners.

The survey found that 83 per cent of respondents viewed tax reporting as a stressful task, with only 13 per cent of respondents understanding what existing tax breaks for small businesses were.

Sixty-four per cent of business owners preferred to do other administration tasks such as filing papers, chasing outstanding invoices and even cleaning the office fridge, rather than file their taxes.

In addition, the survey indicated that nearly 40 per cent of business owners kept their tax receipts in a shoebox, rather than storing them digitally - this was the most accurate for business owners aged 18 to 34 years (46 per cent) and for businesses earning less than $50,000 annually (49 per cent).

The main concerns of most respondents when it came to tax reporting were keeping track of their receipts and invoices (43 per cent), with petrol and stationery receipts the most likely to get lost; and reporting inaccurate financials (41 per cent). Thirty-five per cent of small business owners were concerned over the length of time it takes to lodge financials, and just over a third were worried about lodging these statements on time.

Consequently, most small businesses wanted to improve the efficiency of their tax reporting (78 per cent), and 44 per cent aimed to become more organised in filing their receipts and relevant information during the year. Nearly a third of small business owners believed they could improve their tax reporting processes if they were helped out by an accountant or business mentor.

The survey results suggest that small business owners may be missing out on important tax concessions - read D&B's daily tax tips for more information.

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