As the October 31 tax return deadline approaches, self-employed Australians are grappling with increasing costs, with the average expense for tax preparation hitting $1,000 this year.
New data from Hnry reveals that half of sole traders have received a lower rebate compared to previous years, adding to their financial burden.
Hnry’s recent Sole Trader Pulse survey, the only nationwide study of sole traders in Australia, exposes a widespread state of tax uncertainty. Nearly half (47%) of self-employed individuals are yet to submit their tax returns, and almost a fifth (17%) haven’t even started the process, despite the deadline being imminent.
Karan Anand, Managing Director of Hnry Australia, highlighted the challenges faced by the country’s 1.5 million sole traders. Tax season can be perplexing and stressful for many self-reliant entrepreneurs, who already spend an average of six hours per week on financial administration. The phasing out of the Low and Middle Income Tax Offset (LMITO) adds further pressure as they face the prospect of a reduced rebate, making it unsurprising that many are delaying their submissions, even with the risk of a $313 late fine.
The study also reveals gender disparities, with self-employed women incurring lower tax submission costs, averaging $610 compared to $1,199 for men. However, this doesn’t necessarily equate to financial confidence, as more men express positivity about their business performance and job security.
Anand noted that while some positive sentiment shifts occurred over the past quarter, sole traders remain cautious about the coming year. Despite experiencing the benefits of self-employment, a significant proportion have concerns about the economy, including expectations of a recession within the next year.
Hnry aims to alleviate the tax-related burdens of sole traders, enabling them to focus on their passions. By automatically handling tax payments throughout the year and preparing tax returns, including accounting for tax-deductible expenses, Hnry offers peace of mind and reduces the administrative workload for self-employed individuals.
“Across the board, we’ve seen independent earners’ feelings towards their financial performance move in the right direction over the past three months – with those feeling positive increasing from 36% to 46%. The majority are also feeling satisfied in their profession (62%) and positive about their work-life balance (65%). So, it’s clear sole traders are continuing to reap the benefits of working for themselves – from the freedom of pursuing their passions, to the flexible lifestyle it offers.
“However, just a fifth (19%) feel good about the current state of the economy, a quarter (26%) believe the country is already in recession, and a further 41% expect that we will be within the next year. As a key barometer of economic health in Australia, it’s more important now than ever to ensure this sector receives the right support and feels empowered to focus on the business of their business,” Anand said.
For more information, visit hnry.com.au/au/soletraderpulse.
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