Tax time confusion spikes among small business owners, survey shows
Recent research indicates are growing proportion of small business owners are finding the tax system and the process of completing a tax return confusing.
The Officeworks’ EOFY report has revealed that 93 per cent of Australians are either just as confused as there were last year or more confused about completing their tax return.
Similarly, two thirds of small business leaders find the tax system confusing, a four per cent increase from last year.
The research also found there are some common misconceptions circulating the small business community in regards to the rules for tax deductions with 61 per cent falsely assuming that bank statements can be used as proof of expenses.
The survey also found that 47 per cent incorrectly believe they can claim both the fixed rate method and individual working from expenses in the same return.
Around a quarter also incorrectly believe that home to work travel is claimable.
The research also highlighted two distinct approaches to maximising tax returns.
“One third of Australians are looking to save money by doing their tax return themselves, a four per cent increase from 2023 (29 per cent), however, more than a quarter (28 per cent) are going to a professional tax agent to help maximise their return, up four per cent from 2023,” said Officeworks.
Financial expert and founder of Women with Cents, Natasha Janssens said that many Australians underestimate their tax obligations, often relying on word of mouth, or believing common misconceptions that could affect their entitlements.
“With an increasing number of Australians looking to do their tax returns themselves this year, it’s more important than ever to understand what and how you can claim,” said Janssens.
“While using bank statements is common practice, it’s important to recognise their limitations as standalone proof of purchase, and misunderstanding methods and assuming standard claims can often lead to missed deductions or penalties that could impact your chances of claiming everything you’re entitled to.”
Officeworks general manager, merchandise Jim Berndelis said that Australians want to make the most of end of financial year but this research reinforces that it can be a confusing process for many.
“Our research has shown that the number of Australians keeping a physical folder of receipts has dropped (from 48 per cent in 2023 to 43 per cent in 2024), highlighting a move toward digital receipts and online tracking tools and apps, especially for Gen Z customers,” said Berndelis.
“At Officeworks we offer both options so, whatever your preferred approach, you can keep track of your tax deductible spend more easily heading into EOFY.”
ATO Assistant Commissioner Rob Thomson said for Australians planning on claiming a tax deduction for a work-related expense, the ATO has a range of resources on our website to help you get your claims right.
“Check out our range of occupation-specific guides to help you work out what you can and can’t claim – visit ato.gov.au/occupations,” said Thomson.
“We have a number of online tools and calculators that can help you calculate your deduction correctly, including working from home, self-education and car expenses. We also have a depreciation tool to help you work out the decline in value of any depreciating assets you have purchased.”
