A Research Report on - Australian Taxation Office · A Research Report on: UNDERSTANDING THE SMALL...

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A Research Report on:

UNDERSTANDING THE SMALL AND MEDIUM

ENTERPRISE MARKET

Ref No. 19099 • 23 November 2010

Sweeney Contacts:

Aliza Sebel and David Barmer

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Table of Contents

Executive Summary .......................................................................................................................................................... 3

Introduction .................................................................................................................................................................. 20

Research Objectives ....................................................................................................................................................... 21 Methodology.................................................................................................................................................................. 23

Sample Characteristics .................................................................................................................................................... 25

THE DETAILED FINDINGS ................................................................................................................................................ 26

Section 1: The Global Financial Crisis ................................................................................................................................ 26

The Impact of the GFC .................................................................................................................................................... 27

Steps Taken to Overcome the Negative Impact of the GFC ................................................................................................... 29

Section 2: The Profile of the SME Sector ............................................................................................................................ 30

Profile of the SME Sector ................................................................................................................................................. 31

Section 3: Attitudes to the ATO and Taxation ..................................................................................................................... 33 Summary of Attitudes ..................................................................................................................................................... 34

Provides Me with the Information I Need............................................................................................................................ 35

Advice from the ATO Provides Me With Certainty to Manage Tax Affairs .................................................................................. 37

The ATO Does a Good Job in Educating and Informing ......................................................................................................... 39

The ATO Treats This Business Reasonably and Fairly............................................................................................................ 41

Section 4: ATO Products, Services, Tools and Channels ........................................................................................................ 43

Usage of ATO Products or Services in the Past 12 Months ..................................................................................................... 44

Perceived Usefulness of ATO Products/Services ................................................................................................................... 48

Channel Preference for Obtaining Information from the ATO ................................................................................................. 50

Section 5: Income Tax (PAYG) ......................................................................................................................................... 52 Is Business Part of the PAYG System? ............................................................................................................................... 53

Understanding of Income Tax (PAYG) Obligations ................................................................................................................ 54

Ease of Accessing Income Tax Information from the ATO...................................................................................................... 56

Need for More PAYG Information ...................................................................................................................................... 57

Recently Used Income Tax Information Sources .................................................................................................................. 58

How Could the ATO Better Assist SMEs with Income Tax (PAYG) Compliance?.......................................................................... 59

Section 6: Fringe Benefits Tax (FBT) ................................................................................................................................. 60

Incidence of Payment of FBT ............................................................................................................................................ 61

Understanding of FBT Obligations ..................................................................................................................................... 63

Understanding of FBT Obligations ..................................................................................................................................... 63 Ease of Accessing FBT Information from the ATO ................................................................................................................ 66

Need for More FBT Information......................................................................................................................................... 68

Recently Used FBT Information Sources ............................................................................................................................. 69

How Could the ATO Better Assist SMEs with FBT Compliance? ............................................................................................... 70

Section 7: Capital Gains Tax (CGT) ................................................................................................................................... 71

Incidence of Involvement with CGT ................................................................................................................................... 72

Understanding of CGT Obligations ..................................................................................................................................... 73

Ease of Accessing CGT Information from the ATO ................................................................................................................ 75

Need for More CGT Information ........................................................................................................................................ 76

Recently Used CGT Information Sources ............................................................................................................................ 77

How Could the ATO Better Assist SMEs with CGT Tax Compliance? ......................................................................................... 78 Usage of the “Guide to Capital Gains Tax” Publication .......................................................................................................... 79

Section 8: A Comparison of PAYG, FBT and CGT Results ....................................................................................................... 80

Understanding of Tax Obligations...................................................................................................................................... 81

Ease of Accessing Tax Information from the ATO ................................................................................................................. 82

Need for More Tax Information ......................................................................................................................................... 83

Recently Used Tax Information Sources ............................................................................................................................. 84

Section 9: Tax Compliance .............................................................................................................................................. 85

Attitudes Towards Tax Compliance – Summary ................................................................................................................... 86

The Complexity of Tax Laws Make Compliance Difficult ........................................................................................................ 87

It is the Responsibility of Owners and Directors to Ensure Their Business is Fully Compliant with Tax Obligations .......................... 89 Suggested Initiatives to Assist SME with Tax Compliance...................................................................................................... 91

Section 10: Broader Compliance Issues ............................................................................................................................. 92

Phoenix Activities ........................................................................................................................................................... 93

Corporate Governance .................................................................................................................................................... 94

International Dealings ..................................................................................................................................................... 96

Business Exist/Succession Planning ................................................................................................................................... 98

Trusts .......................................................................................................................................................................... 99

Capital Management ..................................................................................................................................................... 101

Section 11: External Tax Professionals – Usage and Satisfaction .......................................................................................... 104

Use of External Tax Professionals .................................................................................................................................... 105 Types of External Tax Professionals Used ......................................................................................................................... 106

Satisfaction with External Tax Professionals ...................................................................................................................... 107

APPENDIX 1: Trends in the Economic Health of the SME Sector (200 Employees or Less) Sourced from Sensis ® Business Index .. 108

APPENDIX 2: The Questionnaire ..................................................................................................................................... 116

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Executive Summary

One of the objectives of the Australian Taxation office (ATO) is to increase Small and Medium Enterprises

(SMEs) voluntary compliance with their tax obligations. Consequently, a national study was undertaken

amongst SMEs (segments; $2 to $10 million, $10 to $50 million, $50 to $100 million and $100 to $250

million) to understand their general compliance perceptions, knowledge and behaviour, and more

specifically, their understanding of Fringe Benefits Tax (FBT), Capital Gains Taxes (CGT) and Pay As You Go

withholding taxes (PAYG).

The findings are based on 1,000 telephone interviews with the person in the business who was best

informed about taxation matters.

For analysis purposes the data was weighted by turnover segment within state and Business Industry Code

to accurately mirror the characteristics of the national SME population.

In the pages to follow we highlight the key research findings. Where appropriate, comparisons are made

with the 2008 study.

Differences at the 95% significance level are highlighted in the charts in the body of the report. Those

higher than the total sample average are identified by a green circle; those lower than the total sample

average by a red square.

Setting the Scene: The Overall Australian SME Business Economic Environment

Long term quarterly tracking of the economic outlook in the SME sector (Source: Sensis ® Business Index)

shows that the level of business confidence fell dramatically through 2008 and early 2009. In February

2009 it reached the lowest level since the study began in 1993.

Since that time there has been a marked recovery and, while confidence remains short of its peak level,

most of the decline has been reversed.

The extent of the turnaround is evidenced by the response to the question about the Global Financial Crisis

(GFC) in this “Understanding the Small and Medium Enterprise Market” study conducted by Sweeney

Research on behalf of the ATO. Although approximately half the businesses reported that they were

adversely affected by the GFC, just 8% indicated that they had not yet recovered. One in twenty

businesses reported that the GFC benefited them while just over four in ten experienced no or minimal

impact…

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As shown below, larger SME enterprises were more likely to have been adversely affected by the GFC, but

also more likely to be recovering, with 57% in this segment reporting a negative impact but recovering

(versus the total market average of 42%).

Base: Total sample (1000)

Q13a Which of the following statements best describes the impact of the global financial crisis on this business?

The Impact of the Global Financial Crisis

Summary




Summary

It has had a negative impact and this business has

not shown any signs of recovery

It has had a negative impact but this business has

fully recovered or is recovering

It has had minimal or no impact

It has had a positive impact







44%

42%

8%

4%

62%

53%

56%

49%

51%

Total

negative

(101)

(193)

(300)

(406)

(1000)

Base

#

Base: Total sample

Note: Horizontal percentages

Q13a Which of the following statements best describes the impact of the global financial crisis on this

business?


by business size

Negative

but no

recovery

Negative

but

recoveringNo impact

Positive

impact

5%

4%

8%

9%

8%

57%

49%

49%

41%

42%

31%

42%

39%

45%

44%

TURNOVER SEGMENT

3%

2%

4%

4%

4%

$100 to $250 million turnover




TOTAL

62%

53%

56%

49%

51%

Total

negative

(101)

(193)

(300)

(406)

(1000)

Base

#

Base: Total sample


Q13a Which of the following statements best describes the impact of the global financial crisis on this

business?


by business size

Negative

but no

recovery

Negative

but

recoveringNo impact

Positive

impact

5%

4%

8%

9%

8%

57%

49%

49%

41%

42%

31%

42%

39%

45%

44%

TURNOVER SEGMENT

3%

2%

4%

4%

4%





TOTAL

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There were a number of different strategies employed by SMEs to overcome the negative impact of the

GFC. Cost cutting – like spending less and being more cost effective – was clearly the number one initiative

(27%), followed by cutting back on staff (13%). About one in ten referred to some form of restructuring or

diversification. Others took a more proactive rather than reactive stance by selling more (9%), advertising

more (7%) or working harder (6%).

Attitudes to the ATO

SME attitudes towards the ATO were canvassed via a series of agree/disagree statements. The results

indicate the ATO is highly regarded with respect to treating businesses fairly, communicating effectively on

tax affairs and providing ongoing education of the business community on taxation matters.

As shown overleaf…

91% perceive that the business is treated fairly and reasonably by the ATO;

76% concur that the ATO supplies the business with the information required to manage tax affairs;

71% agree that the ATO advice provides them with the certainty to manage the business‟ tax affairs; and

66% endorse the ATO‟s efforts in educating/informing the business community about taxation matters…

Base: Reported GFC as having a negative impact (456)

Q13b What strategies, if any, have you adopted to overcome the negative impacts of the global financial crisis?

Steps Taken to Overcome the Negative Impact of the GFC




Working harder

More focused on the business/aware/cautious

Improving customer service

Advertise/more promotions

Getting new work/selling more

Internal restructure/diversifying

Cutting back on staff/not replacing staff

Cutting costs/ more cost effective/spend less

Working harder







Cutting costs/ more cost effective/spend less

13%

9%

9%

7%

6%

6%

4%

27%

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As shown below, the vast majority in every segment agree with each of the statements. We note the $10

to $50 million dollar segment is more likely to affirm the ATO‟s activities in terms of providing information

for taxation management and educating/informing the business community about taxation matters.

The Tax Office does a good job in educating and

informing the business community about taxation

matters

The advice given by the Tax Office provides me

with the certainty I need to manage the tax affairs

of this business

The Tax Office provides me with the information I

need to manage the tax affairs of this business

The Tax Office treats this business fairly and

reasonably



matters



of this business




reasonably


Q6a I‟d like to read out some statements about the Tax Office and taxation. Please indicate whether you

strongly agree, agree, disagree or strongly disagree with the following

Attitudes to the ATOSummary




Attitudes to the ATOSummary

8%

8%

75%

68%

63%

61%

19%

22%

27%5%

16% 6%

Agree strongly Agree Disagree/disagree strongly Don't know

Base: Total sample



Turnover

66%

71%

76%

91%

Total

Attitudes to the ATO by turnover segment

63%

70%

75%

90%

$2 to $10

million

$100 to $250

million

$50 to $100

million

$10 to $50

million% Agree/Strongly Agree

71%

70%

77%

97%

68%

68%

75%

96%

82%

The Tax Office provides me with the

information I need to manage the tax

affairs of this business

73%

72%

93%

The Tax Office does a good job in

educating and informing the business

community about taxation matters

The advice given by the Tax Office

provides me with the certainty I need to

manage the tax affairs of this business

The Tax Office treats this business fairly

and reasonably

Base: Total sample



Turnover

66%

71%

76%

91%

Total

Attitudes to the ATO by turnover segment

63%

70%

75%

90%

$2 to $10

million

$100 to $250

million

$50 to $100

million

$10 to $50

million% Agree/Strongly Agree

71%

70%

77%

97%

68%

68%

75%

96%

82%




73%

72%

93%


educating and informing the business

community about taxation matters


provides me with the certainty I need to

manage the tax affairs of this business

The Tax Office treats this business fairly

and reasonably

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A more detailed analysis of the results suggest that those who deal with the ATO on a more regular basis

and are, themselves, financial professionals have a more positive view of the ATO. Clearly, interaction with

the ATO has the potential to enhance perceptions.

ATO Products, Tools, Services and Channels

Nearly 90% of SMEs accessed at least one ATO product/service in the past 12 months, most commonly the

website (79%). Close to half have accessed the business portal (47%) and online calculators and tools

(46%). In addition, over a third contacted the ATO on the business tax enquiries line (37%) and a quarter

used the legal database (25%). The table below summarises.

Base: Total sample


strongly agree, agree, disagree or strongly disagree with the following*Respondent is Chief Financial Officer, Financial Controller/Director of Finance, Financial Manager, Accountant, Bookkeeper

75%

72%

83%

92%

Yes

*Financial

professional Past year ATO contact

72%

74%

82%

91%

Phone

69%

71%

78%

92%

Online

51%

65%

60%

85%

None

66%

71%

76%

91%

Total

Attitudes to the ATO by occupation status and ATO contact

No% Agree/Strongly Agree

57%

68%

70%

90%





educating and informing the

business community about taxation

matters


provides me with the certainty I need

to manage the tax affairs of this

business

The Tax Office treats this business

fairly and reasonably

Base: Total sample


strongly agree, agree, disagree or strongly disagree with the following*Respondent is Chief Financial Officer, Financial Controller/Director of Finance, Financial Manager, Accountant, Bookkeeper

75%

72%

83%

92%

Yes

*Financial

professional Past year ATO contact

72%

74%

82%

91%

Phone

69%

71%

78%

92%

Online

51%

65%

60%

85%

None

66%

71%

76%

91%

Total

Attitudes to the ATO by occupation status and ATO contact

No% Agree/Strongly Agree

57%

68%

70%

90%





educating and informing the

business community about taxation

matters


provides me with the certainty I need

to manage the tax affairs of this

business

The Tax Office treats this business

fairly and reasonably


Q10a Have you used the following Tax Office products or services in the last 12 months?

Usage of ATO Products or Services in the Past 12 Months

Summary




Summary

Used no Tax Office product

Tax Office online subscription feature

SME Communicator

SME Tax Forum

Tax Office legal database

Tax Office business tax enquiries line – 13 28 66

Online version of calculators/other tools

The Tax Office business portal, which businesses register to use

Tax Office website



SME Communicator

SME Tax Forum





Tax Office website

47%

46%

37%

25%

9%

3%

2%

13%

79%

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When comparing the ATO products and services used in 2010 with those used in 2008, the ATO website

remains the most popular product. The data also suggests that business portal and calculator usage has

increased in the past two years while use of the business tax enquiries line appears to be declining.

However, further analysis of the data reveals that telephone enquirers use the website extensively. Some

89% of those who have contacted the business tax enquiries line have also used the website. This

proportion is higher than that for non-telephone enquirers (74%). This suggests that the website is not a

substitute for the business tax enquiries line.

Base: Total sample 2008 (1068); 2010 (1000)

2008 - Q15 : I am going to name 9 key products, services, and tools the Tax Office provides for businesses.

Please indicate whether you have used each product, service, or tool before today.

20010 – Q10a: Have you used the following Tax Office products or services in the last 12 months?

Usage of ATO Products or Services

Comparison with 2008





Usage of ATO Products or Services


48%

38%

66%

33%

14%

79%

47%

46%

37%

25%

9%

92%

2008 ever used 2010 used last year





The Tax Office business portal, which businesses

register to use

Tax Office website






register to use

Tax Office website

(637)(363)(1000)

2%

3%

9%

25%

46%

47%

79%

Total



Usage of ATO Products or Services in the Past 12 Months?Cross Usage

5%

4%

18%

30%

55%

61%

89%

Have used the

business tax

enquiries line

Have not used the

business tax

enquiries line

1%SME Tax Forum

39%The Tax Office business portal, which

businesses register to use

2%

4%

22%

40%

74%

SME Communicator




Tax Office website

(637)(363)(1000)

2%

3%

9%

25%

46%

47%

79%

Total



Usage of ATO Products or Services in the Past 12 Months?Cross Usage

5%

4%

18%

30%

55%

61%

89%

Have used the

business tax

enquiries line

Have not used the

business tax

enquiries line

1%SME Tax Forum



2%

4%

22%

40%

74%

SME Communicator




Tax Office website

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The table below examines product/service usage by turnover segment, showing that the $10 million plus

businesses are more likely to use the business portal, website and legal database than their smaller

counterparts. The $100 to $250 million segment is also more likely to contact the ATO by phone.

Users of each product/service evaluated its usefulness in helping the business meet its tax obligations.

The most favourably evaluated products/services were the calculator (65% extremely/very useful) and the

business portal (64% extremely/very useful). The website follows though someway behind (50%). The

service which attracted the highest level of criticism was the business tax enquiries line (17% not useful).

Base: Product/service used *Note small sample size)

Q10c How would you rate the usefulness of [insert name of product/service] in helping this business meet its

tax obligations? Would you say [Insert Product Service] is…

Usefulness of ATO Products/Services

Summary




Usefulness of ATO Products/Services

Summary

SME Communicator *(35)

Tax Office business tax enquiries line (363)

Tax Office legal database (283)

SME Tax Forum *(26)

Tax Office online subscription feature (90)

Tax Office website (848)

The Tax Office business portal (527)

Online calculators/other tools (463)




SME Tax Forum *(26)





24%

12%

11%

14%

17%

7%

12%

47%

40%

38%

35%

30%

21%

29%

15%

31%

31%

41%

46%

40%

48%

45%

50%

8%

11%

17%

7%

13%

19%

18%

4%

Extremely useful Very useful Fairly useful Not too/not at all usefull Don't know/Can't say

(101)(193)(300)(406)(1000)

13%

9%

37%

2%

3%

46%

25%

79%

47%

Total



Usage of ATO Products or Services in the Past 12 Monthsby turnover segment

14%

9%

37%

3%

3%

46%

24%

77%

45%

$2 to $10

million

$100 to $250

million

$50 to $100

million

$10 to $50

million

4%

11%

45%

1%

3%

39%

37%

94%

68%

4%

6%

36%

2%

3%

51%

37%

92%

62%

36%Tax Office business tax enquiries line

12%Tax Office online subscription feature

8%None used

88%Tax Office website

3%

4%

44%

30%

55%

SME Tax Forum

SME Communicator



The Tax Office business portal

(101)(193)(300)(406)(1000)

13%

9%

37%

2%

3%

46%

25%

79%

47%

Total



Usage of ATO Products or Services in the Past 12 Monthsby turnover segment

14%

9%

37%

3%

3%

46%

24%

77%

45%

$2 to $10

million

$100 to $250

million

$50 to $100

million

$10 to $50

million

4%

11%

45%

1%

3%

39%

37%

94%

68%

4%

6%

36%

2%

3%

51%

37%

92%

62%



8%None used


3%

4%

44%

30%

55%

SME Tax Forum

SME Communicator




Page 10 of 116

Trend data on usefulness is provided below. Although ratings are not strictly comparable due to the use of

a 0 to 10 rating scale in the 2008 study, the rank order is entirely consistent.

Analysis by turnover segment indicates that the business portal is perceived to be more useful by the

smaller enterprises ($2 to $10 million and $10 to $50 million); the calculators were also more favourably

evaluated by those in the $2 to $10 million segment while the legal database attracts higher ratings

amongst the largest enterprises. Website ratings do not differ significantly by turnover segment.

36%

65%

38%

50%

64%

Total

Base: Product/service used (variable)

Note: * Small base



Usefulness of ATO Products/Servicesby turnover segment

37%

66%

38%

50%

65%

$2 to $10

million

$100 to $250

million

$50 to $100

million

$10 to $50

million% Extremely/Very Useful

30%

*57%

46%

51%

54%

33%

56%

34%

44%

49%



57%

38%

61%




36%

65%

38%

50%

64%

Total


Note: * Small base



Usefulness of ATO Products/Servicesby turnover segment

37%

66%

38%

50%

65%

$2 to $10

million

$100 to $250

million

$50 to $100

million

$10 to $50


30%

*57%

46%

51%

54%

33%

56%

34%

44%

49%



57%

38%

61%




2008 vs. 2010

Perceptions of Usefulness – Research Order

2008 vs. 2010


Business enquiry line

Online subscription

Website

Business portal

Online calculators

2008


Online subscription

Website

Business portal

Online calculators

2008


Online subscription

Website

Business portal

Online calculators

2010


Online subscription

Website

Business portal

Online calculators

2010

= rated

LOWEST RATED

HIGHEST RATED

Page 11 of 116

The most preferred channel for ATO information is clearly the website – nominated by 52% overall rising

to over 60% of the $10 million dollar plus turnover segments.

Channel preference trends since 2008 suggest greater appeal of the business portal where preference has

risen from 5% to 16%. The business tax enquiries line has also shown a lift in popularity (up seven

percentage points) whilst preference for paper mail has declined from 10% to 4%.

1%N/AThrough Tax Office seminars provided by the Tax Office

6%12%Email from/to the Tax Office

4%10%Paper mail from/to the Tax Office

16%5%Tax Office business portal, which businesses register to use

17%10%By calling the Tax Office 13 28 66 business enquiry line

Base: Those who nominated one of the above

Q11. For this business, what is the most preferred method of obtaining tax information from the Tax Office?

Channel Preference for Obtaining Information from the ATOTrends

2010

(900)

2008

(619)

0%

58%

N/A

62%

By visiting the Tax Office

Tax Office website








Channel Preference for Obtaining Information from the ATOTrends

2010

(900)

2008

(619)

0%

58%

N/A

62%


Tax Office website

Channel Preference for Obtaining Information from the ATO

Summary



Tax Office website

By calling the Tax Office 13 28 66 business enquiry line

Tax Office business portal, which businesses register to use

Email from/to the Tax Office

Paper mail from/to the Tax Office

Through Tax Office seminars provided by the Tax Office


No preference

15%

14%

5%

4%

1%

0%

10%

52%

Page 12 of 116

Specific Taxes

In the pages to follow we highlight key results for each of the PAYG, FBT and CGT taxes.

PAYG

PAYG data is based on the 93% of businesses which have PAYG obligations.

In terms of knowledge levels PAYG is well understood with 94% indicating they understand PAYG

obligations well or very well.

The vast majority, 74% can easily access the required information from the ATO.

Base: PAYG Businesses (935)

Q7b Overall, how well do you understand this business‟s PAYG obligations?

Understanding of PAYG Obligations Summary



Understanding of PAYG Obligations Summary

Not at all

well

1%

Well

35%

Not very

well

5%

Very well

59%


Q7b Can you easily get the income tax information that you need from the Tax Office?

Ease of Accessing of PAYG Information from the ATOSummary



Ease of Accessing of PAYG Information from the ATOSummary

Not easily

10%

Not sure

7%

Not

required

9%

Easily

74%

Page 13 of 116

Some 27% expressed a desire for more ATO sourced PAYG information with those in the $10 to $50 million

and $50 to $100 million segments a little more likely to do so.

Recently used PAYG information sources reveal that the ATO and external tax professionals are almost

equally likely to be used. Some 68% have used one or more of the main ATO information sources (ATO

website, business portal or call centre) and 70% have used accountants or tax agents.


Q8d. Would you like more income tax information from the Tax Office?

Requirement for More Information on PAYG

by turnover segment



Requirement for More Information on PAYG

by turnover segment

$100 to $250 million turnover (95)




Total (935)





Total (935)

25%

33%

32%

19%

27%


Q9e Which of the following sources, if any, have you recently used for information on Income Tax?

Recently Used PAYG Information SourcesSummary



Recently Used PAYG Information SourcesSummary

No information on PAYG required

Tax Office call centre

Industry or professional body to which you belong


Tax Office website

Tax professional such as an accountant or tax agent





Tax Office website


60%

29%

18%

17%

6%

70%

Used at least one ATO

source: 68%

Page 14 of 116

FBT

FBT data is based on businesses which usually pay FBT – 44% of the total sample.

Those who pay FBT were asked how well they understood their FBT obligations. Whilst most understood

these „well‟ or „very well‟ a sizeable 17% admit to limited or no understanding.

Sixty-one percent indicated it was easy to access the requisite information from the ATO. However, if we

exclude the „not sure‟ and „not required‟ we see that 84% find the information easy to obtain and 16% find

it not easy.

Base: Business pays FBT (603)

Q7b Overall, how well do you understand this business‟s FBT obligations?

Understanding of FBT Obligations Summary



Understanding of FBT Obligations Summary

Not at all

well

5%

Well

39%

Not very

well

12%Very well

45%


Q7b Can you easily get the FBT information from the Tax Office that you need?

Ease of Accessing of FBT Information from ATOSummary



Ease of Accessing of FBT Information from ATOSummary

Not easily

11%

Not sure

12%

Not

required

16%Easily

61%

Page 15 of 116

Forty percent would like more FBT information from the ATO rising to 48% amongst the $10 to $50 million

turnover businesses and 46% of the $100 to $250 million segment.

Recently used FBT information sources reveal that external tax professionals are more widely used than the

ATO. In total 59% have used one or more of the main ATO information sources (ATO website, business

portal or call centre) and 74% a tax professional.

Base: Pay FBT

Q7d. Would you like more information on FBT from the Tax Office?

Requirement for More Information on FBT

by turnover segment

Base: Pay FBT


Requirement for More Information on FBT

by turnover segment





Total (603)





Total (603)

38%

48%

42%

46%

40%


Q7e Which of the following sources, if any, have you recently used for information on FBT?

Recently Used FBT Information SourcesSummary



Recently Used FBT Information SourcesSummary

No information on FBT required

Seminars/ courses/ training, workshops, various providers




Tax Office website







Tax Office website


54%

21%

21%

7%

2%

5%

74%


source: 59%

Page 16 of 116

CGT

CGT data is based on businesses which have filed a CGT return in the past financial year and/or intend to

do so in the next two years. In total 31% of the sample qualified on one or both of these criteria.

Understanding of CGT obligations is not particularly high, with 33% saying that they understood this area

not at all or not very well.

Fifty-seven percent indicated it was easy to access CGT information from the ATO and 16% said that this

was not easy. Excluding the „not sure‟ and „not required‟, 78% find the information easy to obtain and 22%

not easy.

Base: Business pays CGT (263)

Q8cb Overall, how well do you understand this business‟s CGT obligations?

Understanding of CGT Obligations Summary



Understanding of CGT Obligations Summary

Not at all

well

6%

Well

42%Not very

well

27%

Very well

25%

Base: Business has filed CGT return in FY 2008/09 or expects to do so in next 2 years (263)

Q8d Can you easily get the CGT information from the Tax Office that you need?

Ease of Accessing of CGT Information from ATOSummary



Ease of Accessing of CGT Information from ATOSummary

Not easily

16%

Not sure

16%

Not

required

11%

Easily

57%

Page 17 of 116

Thirty-five percent requested more ATO sourced CGT information, rising to 46% in the $100 to $250 million

segment and falling to 25% in the $50 to $100 million segment.

External tax professionals are more widely used than the ATO for CGT information. Forty-seven percent

have recently used one or more of the ATO information sources (ATO website, business portal or call

centre) for CGT, whilst 74% have used tax professionals.

Base: Business has filed CGT return in FY 2008/09 or expects to do so in next 2 years

Q8d. Would you like more information on CGT from the Tax Office?

Requirement for more information on CGT

By turnover segment



Requirement for more information on CGT

By turnover segment





Total (263)





Total (263)

35%

40%

25%

46%

35%


Q7e Which of the following sources, if any, have you recently used for information on CGT?

Recently Used CGT Information SourcesSummary



Recently Used CGT Information SourcesSummary

No information on CGT required

Other




Tax Office website



Other




Tax Office website


41%

14%

12%

8%

1%

11%

74%


source: 47%

Page 18 of 116

Tax Compliance

Whilst the vast majority perceive that the complexity of tax laws makes compliance difficult there is

widespread recognition that businesses must take full responsibility for compliance.

In response to the question (no. 21):

“Apart from reducing the level of tax, what is the one thing the Tax Office could do to assist

you or this business with compliance?”

The most frequent suggestions were:

simplifying the process, legislation and reporting requirements

simpler and clearer communications/information from the ATO.

Compliance Issues

The study also examined a range of compliance issues relating to Phoenix Activities, Corporate Governance,

Capital Management, International Dealings, Succession Planning and Trusts. The most salient findings

were:

34% are aware of ATO initiatives targeting Phoenix businesses and there is virtually unanimous support

for ATO intervention. However, views are polarised on the ATO‟s effectiveness in this regard – 32% agree

that they are doing a good job; 39% disagree

Almost all agree that they have a good knowledge of Corporate Governance responsibilities (92%) and

that tax compliance is a part of Corporate Governance responsibilities (96%). However, views are more

mixed on the issue of whether Corporate Governance offers any benefits to the business. Whilst 35%

believe that it does not and is merely an administrative burden, 60% view it as good business practice


Q6a Do you strongly agree, agree, disagree or strongly disagree with the following statements about tax

compliance?

Attitudes to Compliance Summary



compliance?

Attitudes to Compliance Summary

31%

48%

65%

20%

2%

26%


It is the responsibility of owners and directors to

ensure their business is fully compliant with tax

obligations

The complexity of the tax laws makes it difficult for

businesses to comply with their tax obligations



obligations



Page 19 of 116

Some 40% of businesses have a Succession Plan in place and eight in ten of these indicate that the

plan includes taxation consequences/obligations

In terms of Capital Management 73% are aware that use of capital of shareholders is subject to income

tax. However, many are unaware of any initiatives which can be taken to avoid tax implications.

External Tax Professionals

Ninety percent of SMEs use external professionals – most commonly accountants (88%), tax agents (31%)

and bookkeepers (10%). Trends since 2008 corroborate these results with accountants being by far and

away the most widely utilized professionals followed someway behind by tax agents and then bookkeepers.

Satisfaction with tax professionals is high with only 1% indicating dissatisfaction to any extent. Accountants

and tax agents are evaluated comparably and more favourably than bookkeepers.

* * * * *

In Summary

The results of this study indicate:

The ATO is well regarded in facilitating voluntary compliance by providing reliable advice and ongoing

education/information on taxation matters. It is also perceived to be fair and reasonable in dealing with

compliance issues.

The ATO website is the most widely used product/service and is the preferred source for obtaining

information from the ATO. However, the business tax enquiries line remains a vital interface with

businesses.

Specialist tools like the calculators and the business portal which offer more streamlined efficient dealings

are likely to become an increasingly important part of the ATO‟s communications portfolio.

There appears to be a requirement for easily accessible and simplified communications on the more

complex taxes – FBT and CGT from the ATO – a role that is currently being filled by accountants and tax

agents to a considerable extent.

Despite the perception that the complexity of tax laws increases the difficulty of compliance, the business

community clearly understands its responsibilities to comply fully with tax obligations. Any initiatives by

the ATO to simplify and streamline processes and communications would further enhance voluntary

compliance by SMEs.

Page 20 of 116

Introduction

The ATO’s business objective is to optimise voluntary

compliance and instil confidence in the tax system amongst the

SME market segment.

The ATO has the understandable aim of increasing SMEs‟ voluntary compliance with their tax obligations.

To help achieve this objective, the ATO requires a detailed and ongoing understanding of SMEs‟

perceptions, attitudes and behaviours to maximise the effectiveness of compliance related educational,

product and communication initiatives.

Research in this area was last conducted in 2008. However, since that time the Global Financial Crisis has

had a major impact on SMEs in terms of the health of the balance sheet and the potential ramifications for

taxation compliance and lodgement.

In late 2009, Sweeney Research was commissioned to undertake a new study to examine attitudes and

behaviour in the SME sector to provide the ATO with insights to optimise voluntary compliance amongst

businesses.

This project provides the findings of this research which are based on a total of 1,000 telephone interviews

with taxation decision-makers in SMEs within the following four turnover segments: $2 - $10 million; $10 –

$50 million; $50 - $100 million and $100 - $250 million.

Page 21 of 116

Research Objectives

The purpose of the research was to examine the following issues for each of the four turnover

segments:

Overall Research

Objective

To optimise SMEs voluntary compliance with tax obligations by

understanding their education and information requirements; channel

preferences for receiving information from the ATO; usage and usefulness

of ATO products/services. This was explored within the context of the

impact of the GFC.

General Attitudes

Towards the ATO

A series of agree/disagree statements exploring…

The quality of information provided to businesses

Educating the business community on taxation

Fairness and reasonableness.

ATO Products, Services

and Tools

ATO products/services in the past 12 months.

(For each used) Rating of usefulness in terms of helping the business meet its tax

obligations.

Preferred channel for receiving information from the ATO.

Income Tax (PAYG)

Perceived understanding of obligations.

Ease of accessing Income Tax information from the ATO.

Requirement for more Income Tax information from the ATO.

Recently used Income Tax information sources.

Suggestions for improvements on Income Tax.

How could the ATO office improve advice/support to businesses on Income Tax

compliance?

Fringe Benefits Tax

(FBT)


Ease of accessing FBT information from the ATO.

Requirement for more FBT information from the ATO.

Recently used FBT information sources.

How could the ATO improve advice/support to businesses on FBT compliance?

Capital Gains Tax

(CGT)


Ease of accessing CGT information from the ATO.

Requirement for more CGT information from the ATO.

Recently used CGT information sources.

Usage, usefulness and ease of navigating Guide to Capital Gains Tax publication.

How could the ATO improve advice/support to businesses on CGT compliance?

Professional and

Business Associations

Personal and business memberships.

Page 22 of 116

External Tax

Professionals

Usage of and satisfaction with the quality of advice provided by external

professionals.

Global Financial Crisis

What has been the impact on the business?

(If negative) What strategies, if any, have been adopted to overcome the negative

impacts?

A number of additional topic areas related to attitudes, knowledge and behaviour with respect to

compliance were briefly canvassed…

Phoenix activities

Corporate Governance

Compliance

International dealings

Business exits/succession planning and tax consequences

Trusts

Capital management.

In Appendix 1 an analysis of the economic health of the SME sector is provided, sourced from the Sensis ®

Business Index, a quarterly survey undertaken for Sensis by Sweeney Research since 1993.

Appendix 2 contains the questionnaire.

Page 23 of 116

Methodology

A telephone (CATI) survey of 1,000 SMEs was conducted nationally from 29th March to 13th April 2010.

The target respondent was defined as „the person in the business best able to comment on taxation

matters‟.

The ATO provided the sample frame for the study.

Quota controls were applied by turnover segment as follows:

Turnover Segment

$2M to $10M 400

$10M to $50M 300

$50M to $100M 200

$100M to $250M 100

The sample was a nationally representative sample consisting of the following number of interviews in each

State and Territory:

Sample

NSW/ACT 340

Victoria 260

Queensland 190

South Australia 60

Northern Territory 10

West Australia 120

Tasmania 20

For analysis purposes a two-fold weighting procedure was undertaken: firstly, the data was weighted by

turnover segment within state and then further weighting was conducted by BIC (Business Industry Code)

to more accurately mirror the characteristics of the national SME population.

Page 24 of 116

At the 95% confidence interval the following margins of error apply to the survey statistics.

95% Confidence Interval Survey Estimate

10% 90%

20% 80%

30% 70%

40% 60%

50% 50%

N = 1,000 (Total Sample)

+2% +2.5% +3% +3% +3.5%

N = 400 ($2M to $10M)

+3% +4% +4.5% +5% +5%

N = 300 ($10M to $50M)

+3% +4.5% +5% +5.5% +5.5%

N = 200 ($50M to $100M)

+4% +5.5% +6.5% +7% +7%

N = 100 ($100M to $250M)

+6% +8% +9% +9.5% +10%

The response rate = Total Completes

Was 53% Total completes + Refusals

Differences at the 95% significance level are highlighted in the charts in the body of the report. Those

higher than the total sample average are identified by a green circle; those lower than the total sample

average by a red square.

Page 25 of 116

Sample Characteristics

The table below profiles characteristics of SMEs and respondents on a range of variables.

As turnover segment increases…

The target population is more likely to be in a financial rather than managerial role

The business is more likely to be part of or associated with another commercial entity (owned by or owns

another business)

The incidence of FBT obligations increases; (past year or next two year CGT obligations show no

consistent trend by turnover segment; PAYG obligations were high and consistent across all segments)

Total

(1,000) %

$2m to $10m (406)

%

$10m to $50m (300)

%

$50 to $100m (193)

%

$100m to

$250m (101)

%

Main Role of Respondent

Chairman 1 * 1 - -

Owner 21 24 7 2 4

CEO * 1 1 2 2

Managing Director 8 9 4 * 1

General Manager 4 4 4 1 -

Business Manager 3 3 1 3 *

Chief Financial Officer 3 2 7 11 14

Financial Controller/Director of Finance 12 10 17 30 21

Financial Manager 7 7 8 13 14

Accountant 18 15 32 28 36

Bookkeeper 5 5 4 - -

Company Secretary 1 1 1 3 2

Administrative Officer 9 9 6 1 -

Accounts Manager 2 2 1 * 1

Office/Practice Manager 3 3 2 1 -

Financial 47 41 70 82 86

Managerial (non-financial) 50 56 28 15 10

Years of Operation with Current Owners

Up to 2 years 4 4 3 3 3

2 to 5 years 12 12 11 15 18

5 to 9 years 13 13 13 17 11

10 plus years 69 69 73 64 67

Business Owned by Another Business

% Yes 13 9 23 44 59

Business Owns Another Business

% Yes 21 19 31 36 46

Tax Obligations

% of businesses filing FBT returns 44 39 65 84 87

% of businesses filing CGT returns (past FY or

next 2 years) 31 33 26 20 25

% of businesses filing PAYG returns 93 93 90 94 93

Page 26 of 116

THE DETAILED FINDINGS

Section 1: The Global Financial Crisis

Page 27 of 116

The Impact of the GFC

We know from independent quarterly tracking research (Ref: Sensis ® Business Index – Appendix 1) that

confidence in the SME sector declined substantially throughout 2008 and recorded its lowest level in

February 2009. Since then there has been a sharp rebound in confidence levels.

These observations are supported by the results of the current ATO research “Understanding the Small

and Medium Enterprise Market”.

Respondents in the survey were asked to comment on the impact of the Global Financial Crisis on their own

business.

Encouragingly, very few seem to have suffered any longer term damage, with only 8% saying that the GFC

has had a negative impact from which they have yet to show signs of recovery. A sizeable 42% report that

they have recovered or are recovering from a negative impact, and a comparable proportion report minimal

or no impact. A small 4% believe the GFC to have had a positive influence on business.


Q Which of the following statements best describes the impact of the global financial crisis on this business?

Table 1: The Impact of the Global Financial Crisis

Summary


Q Which of the following statements best describes the impact of the global financial crisis on this business?


Summary













44%

42%

8%

4%

Page 28 of 116

In the table below, we examine the impact of the GFC by business size.

The $100 to $250 million turnover segment is significantly more likely than average to report a negative

impact, albeit one from which they have recovered or are recovering.

We have also examined the impact of the GFC by business sector.

The impact of the GFC has been felt right across the board – with around 50% or more in each sector

reporting a downturn. No one sector stands out as being significantly more or less strongly impacted than

average.

62%

53%

43%

49%

55%

62%

53%

56%

49%

51%

Total

negative

(210)

(341)

(168)

(121)

(153)

(101)

(193)

(300)

(406)

(1000)

Base

#

Base: Total sample




by business size

Negative

but no

recovery

Negative

but

recoveringNo impact

Positive

impact

5%

6%

9%

10%

11%

5%

4%

8%

9%

8%

57%

46%

34%

39%

44%

57%

49%

49%

41%

42%

30%

42%

50%

49%

39%

31%

42%

39%

45%

44%

3%100+

EMPLOYEES

6%0 to 4

2%5 to 9

4%10 to 19

4%20 to 99

TURNOVER SEGMENT

3%

2%

4%

4%

4%





TOTAL

62%

53%

43%

49%

55%

62%

53%

56%

49%

51%

Total

negative

(210)

(341)

(168)

(121)

(153)

(101)

(193)

(300)

(406)

(1000)

Base

#

Base: Total sample




by business size

Negative

but no

recovery

Negative

but

recoveringNo impact

Positive

impact

5%

6%

9%

10%

11%

5%

4%

8%

9%

8%

57%

46%

34%

39%

44%

57%

49%

49%

41%

42%

30%

42%

50%

49%

39%

31%

42%

39%

45%

44%

3%100+

EMPLOYEES

6%0 to 4

2%5 to 9

4%10 to 19

4%20 to 99

TURNOVER SEGMENT

3%

2%

4%

4%

4%





TOTAL

49%

56%

58%

49%

49%

48%

51%

53%

51%

Total

negative

(184)

(144)

(59)

(125)

(91)

(129)

(122)

(146)

(1000)

(Base)

#




Table 3: The Impact of the Global Financial Crisisby business sector

Negative

but no

recovery

Negative

but

recoveringNo impact

Positive

impact

11%

4%

4%

5%

14%

9%

8%

10%

8%

38%

52%

54%

44%

35%

39%

43%

43%

42%

44%

40%

36%

45%

47%

46%

44%

40%

44%

2%Financial/Insurance Services

4%Rental/Hiring/Real Estate

3%Professional/Scientific/Technical

Services

5%Other

SECTOR

3%

5%

4%

3%

4%

Retail

Wholesale

Construction

Manufacturing

TOTAL

49%

56%

58%

49%

49%

48%

51%

53%

51%

Total

negative

(184)

(144)

(59)

(125)

(91)

(129)

(122)

(146)

(1000)

(Base)

#




Table 3: The Impact of the Global Financial Crisisby business sector

Negative

but no

recovery

Negative

but

recoveringNo impact

Positive

impact

11%

4%

4%

5%

14%

9%

8%

10%

8%

38%

52%

54%

44%

35%

39%

43%

43%

42%

44%

40%

36%

45%

47%

46%

44%

40%

44%




Services

5%Other

SECTOR

3%

5%

4%

3%

4%

Retail

Wholesale

Construction

Manufacturing

TOTAL

Page 29 of 116


Those who reported a negative impact were asked to describe the steps they have taken to overcome the

effects of the GFC.

Cost cutting – spending less and being more cost effective – was clearly the number one initiative (27%),

followed by cutting back on staff (13%). About one in ten referred to some form of restructuring or

diversification. Others took a more proactive rather than reactive stance by selling more (9%), advertising

more (7%) or working harder (6%).



Table 4: Steps Taken to Overcome the Negative Impact of the GFC



Table 4: Steps Taken to Overcome the Negative Impact of the GFC

Working harder







Cutting costs/more cost effective/spend less

Working harder







Cutting costs/more cost effective/spend less

13%

9%

9%

7%

6%

6%

4%

27%

Page 30 of 116

Section 2: The Profile of the SME Sector

Page 31 of 116

Profile of the SME Sector

Number of Businesses

In total there are 144,462 Australian businesses which falling into the $2 to $250 million turnover segment,

structured as follows1.

Turnover Segment Number of Business Proportion of Businesses

Total 144,462 100.0%

$2M to $10M 117,412 81.3%

$10M to $50M 22,144 15.3%

$50M to $100M 2,915 2.0%

$100M to $250 M 1,991 1.3%

Employment

Not unexpectedly the number of full and part time employees is highly correlated with turnover. Whilst just

2% of $2 to $10 million businesses have 100 plus employees, 55% of those in the $100 to $250 million

employ in the 100 plus range.

Total

(1,000) %

$2m to $10m (406)

%

$10m to $50m (300)

%

$50 to $100m (193)

%

$100m to $250m (101)

%

Number of Full Time and Part Time Employees

Up to 4 21 22 16 10 8

5 to 9 19 22 6 4 4

10 to 19 24 27 13 5 8

20 to 99 29 26 45 33 23

100 plus 6 2 19 47 55

Business Sector

The table below examines business sector by turnover. We note a greater representation of the Financial

and Insurance sector in the higher turnover SMEs; conversely a lower penetration of the Retail sector

amongst the higher turnover SMEs.

1 As at December 2009.

Page 32 of 116

Total

(1,000)

%

$2m to $10m (406)

%

$10m to $50m (300)

%

$50 to $100m (193)

%

$100m to $250m

(101) %

Industry

Manufacturing 8 8 8 10 5

Construction 12 13 6 6 10

Wholesale Trade 10 10 10 11 13

Retail Trade 13 14 10 10 4

Financial And Insurance Services 20 19 25 30 37

Rental, Hiring And Real Estate Services 8 8 10 8 10

Professional, Scientific And Technical Services 7 7 8 5 5

Other Services 22 22 23 20 16

Membership of Professional/Industry Associations

High levels of involvement in both professional and industry associations are apparent which increases with

turnover.

In the $2 to $10 million segment business/peak body membership tends to be more prevalent than

professional affiliations; in higher turnover businesses professional associations are more widespread than

business/peak body memberships… although this is likely to be a function of the greater representation of

respondents in financial roles in the higher turnover segments.

Total

(1,000) %

$2m to $10m (406)

%

$10m to $50m (300)

%

$50 to $100m (193)

%

$100m to

$250m (101)

%

Membership of Professional/Industry Associations

% Respondents member of professional association 41 37 59 74 82

% Businesses member of industry association/ peak body 52 51 54 60 65

Access to Internal Financial Advice

Overall 75% of businesses employed an internal accountant/bookkeeper, rising to 93% amongst the $50 to

$100 million and $100 to $250 million segments.

Total

(1,000) %

$2m to $10m

(406) %

$10m to $50m

(300) %

$50 to $100m

(193) %

$100m to

$250m (101)

%

Business Employs Internal Accountant/ Bookkeeper

% Yes 75 72 88 93 93

Page 33 of 116

Section 3: Attitudes to the ATO and Taxation

Page 34 of 116

Summary of Attitudes

In the survey respondents were asked the extent to which they agreed or disagreed with a series of

statements about the ATO.

As illustrated in the chart above, results are largely positive.

Almost all (91%) support the statement that the ATO “…treats this business fairly and reasonably” and a

sizeable 16% strongly support this view. Only a small proportion (6%) disagree that this is the case.

There is also a clear perception that the ATO “…provides me with the information I need to manage the tax

affairs of this business” with around three-quarters (76%) agreeing and just 19% disagreeing.

A clear majority believe that the advice given by the ATO “…provides me with certainty I need to manage

the tax affairs of this business”. Some 71% agree that this is the case and 22% disagree.

There is somewhat less endorsement for the contention that the ATO “…does a good job in educating and

informing the business community about taxation matters”. However, even here, well over twice as many

agree (66%) than disagree (27%) with this point of view.

In the pages to follow we examine each of these four attitudinal statements by turnover sector and other

key variables.




Table 5: Attitudes to the ATOSummary




Table 5: Attitudes to the ATOSummary

8%

8%

75%

68%

63%

61%

19%

22%

27%5%

16% 6%




matters



of this business




reasonably



matters



of this business




reasonably

Page 35 of 116

Provides Me with the Information I Need

Just over three-quarters (76%) of SME businesses agree that the ATO provides them with the tax

information they need, while 19% disagree with this statement. This results in a „Net Agreement‟ figure of

57% (the proportion who agree less the proportion who disagree). The „Net Agree‟ percentages provide a

useful single measure for comparisons across the various respondent groups. Analysis by business size

reveals that those in the $10 - $50M segment are more likely to agree.

When it comes to industry sector we note that those SME businesses in the Construction industry (10% of

SMEs fall into this industry code) have a significantly less favourable perception that the ATO provides the

information they need to manage the tax affairs of the business. At the other end of the scale, those in the

Professional/Scientific/Technical Services sector (7% of all SMEs) are most positive towards the ATO‟s

information provision.

48%

59%

57%

54%

57%

58%

55%

68%

55%

57%

Net agree

(210)

(341)

(168)

(121)

(153)

(101)

(193)

(300)

(406)

(1000)

(Base)

#



Net Agree = % Agree - % Disagree

Q6 I‟d like to read out some statements about the Tax Office and taxation. Please indicate whether you

strongly agree, agree, disagree or strongly disagree with the following…

Table 6a: Attitudes to the ATO by business size“The Tax Office provides me with the information I need to manage the tax affairs of this

business”

24%72%100+

DisagreeAgree

19%

20%

21%

17%

19%

20%

14%

20%

19%

78%20 to 99

EMPLOYEES

74%0 to 4

75%5 to 9

77%10 to 19

TURNOVER SEGMENT

77%

75%

82%

75%

76%





TOTAL

48%

59%

57%

54%

57%

58%

55%

68%

55%

57%

Net agree

(210)

(341)

(168)

(121)

(153)

(101)

(193)

(300)

(406)

(1000)

(Base)

#






Table 6a: Attitudes to the ATO by business size“The Tax Office provides me with the information I need to manage the tax affairs of this

business”

24%72%100+

DisagreeAgree

19%

20%

21%

17%

19%

20%

14%

20%

19%

78%20 to 99

EMPLOYEES

74%0 to 4

75%5 to 9

77%10 to 19

TURNOVER SEGMENT

77%

75%

82%

75%

76%





TOTAL

45%

70%

61%

60%

62%

73%

44%

53%

57%

Net agree

(184)

(144)

(59)

(125)

(91)

(129)

(122)

(146)

(1000)

(Base)

#






Table 6b: Attitudes to the ATO by business sector“The Tax Office provides me with the information I need to manage the tax affairs of this

business”

DisagreeAgree

24%

12%

19%

18%

17%

13%

26%

19%

19%



82%Professional/Scientific/Technical Services

69%Other

SECTOR

79%

86%

70%

72%

76%

Retail

Wholesale

Construction

Manufacturing

TOTAL

45%

70%

61%

60%

62%

73%

44%

53%

57%

Net agree

(184)

(144)

(59)

(125)

(91)

(129)

(122)

(146)

(1000)

(Base)

#






Table 6b: Attitudes to the ATO by business sector“The Tax Office provides me with the information I need to manage the tax affairs of this

business”

DisagreeAgree

24%

12%

19%

18%

17%

13%

26%

19%

19%




69%Other

SECTOR

79%

86%

70%

72%

76%

Retail

Wholesale

Construction

Manufacturing

TOTAL

Page 36 of 116

In the table below we look at reactions to this statement by other key variables.

Here, an interesting pattern starts to emerge. Those who are non or minimal users of external tax

professionals have a more positive perception of the ATO‟s ability to provide adequate information.

We also note that those who have had contact with the ATO in the past year (particularly by phone) have a

more positive attitude to the information the ATO provides.

Finally, there is clear evidence that respondents who are financial professionals are more likely than others

to believe the ATO performs well in this area.

In summary, the results suggest that those who handle their tax affairs themselves, deal with the ATO on a

more regular basis and are, themselves, financial professionals, are more likely to agree that the ATO

provides the information needed to manage the tax affairs of this business.

68%

48%

35%

59%

64%

65%

56%

49%

51%

58%

57%

Net agree

25%60%(92)Did not use

(614)

(318)

(896)

(363)

(280)

(414)

(308)

(162)

(838)

(1000)

Base

#

15%83%**Financial professional

22%70%Owner/proprietor/chairman/CEO/company secretary/

administrator


Note: Horizontal percentages; **Includes Chief Financial Officer, Financial Controller/Director of Finance,

Financial Manager, Accountant, Bookkeeper




Table 6c: Attitudes to the ATO by other variables“The Tax Office provides me with the information I need to manage the tax affairs of this

business”

ROLE IN COMPANY

DisagreeAgree

19%

18%

15%

20%

22%

20%

19%

19%

78%Online/web/portal

76%Moderate

80%Small/not at all

USED ATO PRODUCTS/SERVICES IN LAST YEAR

82%Phone

INTERNAL ACCOUNTANT

71%

71%

77%

76%

Substantial

USE OF EXTERNAL TAX PROFESSIONAL

No

Yes

TOTAL

68%

48%

35%

59%

64%

65%

56%

49%

51%

58%

57%

Net agree


(614)

(318)

(896)

(363)

(280)

(414)

(308)

(162)

(838)

(1000)

Base

#



administrator







Table 6c: Attitudes to the ATO by other variables“The Tax Office provides me with the information I need to manage the tax affairs of this

business”

ROLE IN COMPANY

DisagreeAgree

19%

18%

15%

20%

22%

20%

19%

19%


76%Moderate

80%Small/not at all


82%Phone

INTERNAL ACCOUNTANT

71%

71%

77%

76%

Substantial


No

Yes

TOTAL

Page 37 of 116

Advice from the ATO Provides Me With Certainty to Manage Tax Affairs

Seventy-one percent agree while, 22% disagree that the advice sought from the ATO provides the business

with certainty to manage the business tax affairs. The level of agreement with this statement is relatively

consistent across the turnover and employment segments with no significant differences being evident.

However, by business industry sector we again note that those in the Professional/Scientific/Technical

Services sector (7% of all SMEs) are the most likely to agree that the advice sought from the ATO provides

the business with certainty to manage the business tax affairs.

43%

46%

51%

53%

49%

48%

43%

52%

48%

49%

Net agree

(210)

(341)

(168)

(121)

(153)

(101)

(193)

(300)

(406)

(1000)

Base

#






Table 7a: Attitudes to the ATO by business size“The advice given by the Tax Office provides me with the certainty I need to manage the tax

affairs of this business”

26%67%100+

DisagreeAgree

22%

22%

22%

20%

22%

25%

20%

22%

22%

68%20 to 99

EMPLOYEES

69%0 to 4

75%5 to 9

73%10 to 19

TURNOVER SEGMENT

70%

68%

72%

70%

71%





TOTAL

43%

46%

51%

53%

49%

48%

43%

52%

48%

49%

Net agree

(210)

(341)

(168)

(121)

(153)

(101)

(193)

(300)

(406)

(1000)

Base

#






Table 7a: Attitudes to the ATO by business size“The advice given by the Tax Office provides me with the certainty I need to manage the tax


26%67%100+

DisagreeAgree

22%

22%

22%

20%

22%

25%

20%

22%

22%

68%20 to 99

EMPLOYEES

69%0 to 4

75%5 to 9

73%10 to 19

TURNOVER SEGMENT

70%

68%

72%

70%

71%





TOTAL

42%

63%

51%

47%

50%

49%

54%

50%

49%

Net agree

(184)

(144)

(59)

(125)

(91)

(129)

(122)

(146)

(1000)

Base

#






Table 7b: Attitudes to the ATO by business sector“The advice given by the Tax Office provides me with the certainty I need to manage the tax


DisagreeAgree

24%

15%

19%

25%

22%

22%

18%

21%

22%




66%Other

SECTOR

72%

71%

72%

71%

71%

Retail

Wholesale

Construction

Manufacturing

TOTAL

42%

63%

51%

47%

50%

49%

54%

50%

49%

Net agree

(184)

(144)

(59)

(125)

(91)

(129)

(122)

(146)

(1000)

Base

#






Table 7b: Attitudes to the ATO by business sector“The advice given by the Tax Office provides me with the certainty I need to manage the tax


DisagreeAgree

24%

15%

19%

25%

22%

22%

18%

21%

22%




66%Other

SECTOR

72%

71%

72%

71%

71%

Retail

Wholesale

Construction

Manufacturing

TOTAL

Page 38 of 116

On this statement we see no significant differences in the level of agreement across the variables shown

below, suggesting that the „certainty‟ provided by the ATO is delivered in a consistent manner.

49%

46%

43%

48%

51%

54%

44%

50%

45%

52%

49%

Net agree


(614)

(318)

(896)

(363)

(280)

(414)

(306)

(162)

(838)

(1000)

Base

#



administrator







Table 7c: Attitudes to the ATO by other variables“The advice given by the Tax Office provides me with the certainty I need to manage the tax


ROLE IN COMPANY

DisagreeAgree

23%

23%

20%

26%

19%

22%

21%

22%


70%Moderate

74%Small/not at all


74%Phone

INTERNAL ACCOUNTANT

69%

67%

73%

71%

Substantial


No

Yes

TOTAL

49%

46%

43%

48%

51%

54%

44%

50%

45%

52%

49%

Net agree


(614)

(318)

(896)

(363)

(280)

(414)

(306)

(162)

(838)

(1000)

Base

#



administrator







Table 7c: Attitudes to the ATO by other variables“The advice given by the Tax Office provides me with the certainty I need to manage the tax


ROLE IN COMPANY

DisagreeAgree

23%

23%

20%

26%

19%

22%

21%

22%


70%Moderate

74%Small/not at all


74%Phone

INTERNAL ACCOUNTANT

69%

67%

73%

71%

Substantial


No

Yes

TOTAL

Page 39 of 116

The ATO Does a Good Job in Educating and Informing

Two-thirds agree with the statement that “the Tax Office does a good job in educating and informing the

business community about taxation matters” but a sizeable 27% disagree.

As illustrated below the $10 to $50 million and $100 to $250 million segments are more supportive of this

view.

Results by industry reveal fairly consistent agree and disagree levels across all sectors, although in terms

of the „Net Agree‟ figure there are signs that those in the Construction (12% of SMEs) and Retail (13% of

SMEs) are less positive than average.

37%

34%

38%

48%

39%

48%

41%

49%

37%

39%

Net agree

(210)

(341)

(168)

(121)

(153)

(101)

(193)

(300)

(406)

(1000)

Base

#






Table 8a: Attitudes to the ATO by business size“The Tax Office does a good job in educating and informing the business community about

taxation matters”

30%67%100+

DisagreeAgree

30%

28%

23%

27%

23%

27%

24%

28%

27%

64%20 to 99

EMPLOYEES

66%0 to 4

71%5 to 9

66%10 to 19

TURNOVER SEGMENT

71%

68%

73%

65%

66%





TOTAL

37%

34%

38%

48%

39%

48%

41%

49%

37%

39%

Net agree

(210)

(341)

(168)

(121)

(153)

(101)

(193)

(300)

(406)

(1000)

Base

#






Table 8a: Attitudes to the ATO by business size“The Tax Office does a good job in educating and informing the business community about

taxation matters”

30%67%100+

DisagreeAgree

30%

28%

23%

27%

23%

27%

24%

28%

27%

64%20 to 99

EMPLOYEES

66%0 to 4

71%5 to 9

66%10 to 19

TURNOVER SEGMENT

71%

68%

73%

65%

66%





TOTAL

(84)

(144)

(59)

(125)

(91)

(129)

(122)

(146)

(1000)

Base

#






Table 8b: Attitudes to the ATO by business sector“The Tax Office does a good job in educating and informing the business community about

taxation matters”

Net agreeDisagreeAgree

42%

38%

39%

42%

33%

36%

34%

40%

39%

28%

29%

28%

26%

28%

29%

29%

28%

27%




70%Other

SECTOR

61%

65%

63%

68%

66%

Retail

Wholesale

Construction

Manufacturing

TOTAL

(84)

(144)

(59)

(125)

(91)

(129)

(122)

(146)

(1000)

Base

#






Table 8b: Attitudes to the ATO by business sector“The Tax Office does a good job in educating and informing the business community about

taxation matters”


42%

38%

39%

42%

33%

36%

34%

40%

39%

28%

29%

28%

26%

28%

29%

29%

28%

27%




70%Other

SECTOR

61%

65%

63%

68%

66%

Retail

Wholesale

Construction

Manufacturing

TOTAL

Page 40 of 116

As illustrated below, those who have had no recent contact with the ATO are far less likely to agree and

substantially more likely to disagree with this statement. Also, those who are the finance professionals

within the business (and, intuitively, more familiar with ATO products and services) have a substantially

more positive view than their lay counterparts.

13%38%51%(92)Did not use

(614)

(318)

(896)

(363)

(280)

(414)

(306)

(162)

(838)

(1000)

Base

#

55%20%75%**Financial professional

22%35%57%Owner/proprietor/chairman/CEO/company

secretary/ administrator







Table 8c: Attitudes to the ATO by other variables“The Tax Office does a good job in educating and informing the business community about

taxation matters”

ROLE IN COMPANY


43%

48%

35%

41%

39%

33%

41%

39%

26%

24%

30%

27%

26%

29%

27%

27%


68%Moderate

65%Small/not at all

USED ATO PRODUCTS/SERVICES IN

LAST YEAR

72%Phone

INTERNAL ACCOUNTANT

65%

62%

68%

66%

Substantial

USE OF EXTERNAL TAX

PROFESSIONAL

No

Yes

TOTAL

13%38%51%(92)Did not use

(614)

(318)

(896)

(363)

(280)

(414)

(306)

(162)

(838)

(1000)

Base

#


22%35%57%Owner/proprietor/chairman/CEO/company








Table 8c: Attitudes to the ATO by other variables“The Tax Office does a good job in educating and informing the business community about

taxation matters”

ROLE IN COMPANY


43%

48%

35%

41%

39%

33%

41%

39%

26%

24%

30%

27%

26%

29%

27%

27%


68%Moderate

65%Small/not at all

USED ATO PRODUCTS/SERVICES IN

LAST YEAR

72%Phone

INTERNAL ACCOUNTANT

65%

62%

68%

66%

Substantial

USE OF EXTERNAL TAX

PROFESSIONAL

No

Yes

TOTAL

Page 41 of 116

The ATO Treats This Business Reasonably and Fairly

As we have seen, there is close to unanimous agreement from SME businesses that the ATO treats them

fairly, and this holds true right across all the SME market segments.

Results are also fairly consistent across the business industry sectors, although there are signs those in the

Rental/Hiring/Real Estate business (8% of all SMEs) seem to be a little more disenchanted than most, with

lower agreement and higher disagreement levels than other sectors.

(210)

(341)

(168)

(121)

(153)

(101)

(193)

(300)

(406)

(1000)

Base

#






Table 9a: Attitudes to the ATO by business size“The Tax Office treats this business fairly and reasonably”

80%10%90%100+


89%

87%

81%

83%

95%

92%

87%

94%

85%

4%

4%

7%

7%

2%

4%

6%

6%

6%

93%20 to 99

EMPLOYEES

90%0 to 4

88%5 to 9

91%10 to 19

TURNOVER SEGMENT

97%

96%

93%

90%

91%





TOTAL

(210)

(341)

(168)

(121)

(153)

(101)

(193)

(300)

(406)

(1000)

Base

#






Table 9a: Attitudes to the ATO by business size“The Tax Office treats this business fairly and reasonably”

80%10%90%100+


89%

87%

81%

83%

95%

92%

87%

94%

85%

4%

4%

7%

7%

2%

4%

6%

6%

6%

93%20 to 99

EMPLOYEES

90%0 to 4

88%5 to 9

91%10 to 19

TURNOVER SEGMENT

97%

96%

93%

90%

91%





TOTAL

(184)

(144)

(59)

(125)

(91)

(129)

(122)

(146)

(1000)

Base

#






Table 9b: Attitudes to the ATO by business sector“The Tax Office treats this business fairly and reasonably”


73%

88%

74%

90%

86%

83%

83%

91%

85%

7%

4%

13%

3%

5%

5%

8%

3%

6%




90%Other

SECTOR

91%

88%

91%

94%

91%

Retail

Wholesale

Construction

Manufacturing

TOTAL

(184)

(144)

(59)

(125)

(91)

(129)

(122)

(146)

(1000)

Base

#






Table 9b: Attitudes to the ATO by business sector“The Tax Office treats this business fairly and reasonably”


73%

88%

74%

90%

86%

83%

83%

91%

85%

7%

4%

13%

3%

5%

5%

8%

3%

6%




90%Other

SECTOR

91%

88%

91%

94%

91%

Retail

Wholesale

Construction

Manufacturing

TOTAL

Page 42 of 116

Results shown no appreciable differences in agreement and disagreement levels in terms of the variables

shown in the table below.

* * * * *

In Summary

The ATO is highly regarded as being fair and reasonable in its treatment of SME businesses, and most

believe that the ATO performs well in its role as an advisor and educator.

Importantly, there is strong evidence that those with a financial background and those who have had more

contact with the ATO have a more positive attitude to its performance in this role.

78%7%85%(92)Did not use

(614)

(318)

(896)

(363)

(280)

(414)

(306)

(162)

(838)

(1000)

Base

#


84%6%90%Owner/proprietor/chairman/CEO/company secretary/

administrator







Table 9c: Attitudes to the ATO by other variables“The Tax Office treats this business fairly and reasonably”

ROLE IN COMPANY


87%

84%

80%

92%

80%

84%

85%

85%

5%

7%

8%

3%

7%

5%

6%

6%


95%Moderate

88%Small/not at all


91%Phone

INTERNAL ACCOUNTANT

87%

89%

91%

91%

Substantial


No

Yes

TOTAL

78%7%85%(92)Did not use

(614)

(318)

(896)

(363)

(280)

(414)

(306)

(162)

(838)

(1000)

Base

#


84%6%90%Owner/proprietor/chairman/CEO/company secretary/

administrator







Table 9c: Attitudes to the ATO by other variables“The Tax Office treats this business fairly and reasonably”

ROLE IN COMPANY


87%

84%

80%

92%

80%

84%

85%

85%

5%

7%

8%

3%

7%

5%

6%

6%


95%Moderate

88%Small/not at all


91%Phone

INTERNAL ACCOUNTANT

87%

89%

91%

91%

Substantial


No

Yes

TOTAL

Page 43 of 116

Section 4: ATO Products, Services, Tools and Channels

Page 44 of 116


All but 13% of SMEs have made use of one or more of the ATO‟s key products and services in the past 12

months. The ATO website (used by 79%) is the most commonly used service followed by the ATO business

portal (47%) and calculators (46%). Sizeable minorities have used the business tax enquiries line (37%)

and the ATO legal databases (25%).

Respondents were also asked the question:

“Are there any other ATO products, services or tools you have used in the last 12 months?”

Some 86% did not nominate any additional service, tool or product while negligible proportions (1% - 2%)

mentioned…

ordering a product

ECI software

newsletter/magazine

tax agent portal (the 1% that mentioned this may be reporting the lodgement channel used by their

agent).



Table 10a: Usage of ATO Products or Services in the Past 12 Months

Summary



Table 10a: Usage of ATO Products or Services in the Past 12 Months

Summary

47%

46%

37%

25%

9%

3%

2%

13%

79%



SME Communicator

SME Tax Forum





Tax Office website



SME Communicator

SME Tax Forum





Tax Office website

Page 45 of 116

In the previous market segment research conducted in July 2008 a similar question was asked:

“I am going to name products, services and tools the ATO provides for business. Please

indicate whether you have used each product, service or tool before today?”

Whilst the 2008 survey asked about ever used and the current survey referred to used last year, it is still

of interest to compare the findings.

As we might expect, the „ever used‟ figures tend to be higher than the „used last year‟ proportions for most

of the services.

The exceptions to this are the ATO business portal and the online calculators – suggesting that usage of

these has risen significantly over the last two years. These results also suggest that use of the business tax

enquiries line may be declining.

It is of interest to pose the question whether users of the business tax enquiries line are any less likely to

use the ATO‟s online services.





Table 10b: Usage of ATO Products or Services






Table 10b: Usage of ATO Products or Services







register to use

Tax Office website






register to use

Tax Office website

48%

38%

66%

33%

14%

79%

47%

46%

37%

25%

9%

92%

2008 ever used 2010 used last year

Page 46 of 116

There is no evidence that this is the case. Indeed, the reverse appears to be true.

As shown, those who have used the business tax enquiries line have by no means relied entirely on this

form of communication. Close to 90% have also used the website, and over 60% used the business portal.

We can also look at these figures the other way around, where we find that those who have used the

website are no less likely to have used the business tax enquiries line. Clearly, the website is not a full

substitute for the personal interface offered by the business tax enquiries line.



Table 10d: Proportion Who Have Used the ATO Business Enquiry Line in

Last 12 Months



Table 10d: Proportion Who Have Used the ATO Business Enquiry Line in

Last 12 Months

40%

21%

37%

Total sample

(1000)

Have used website

(848)

Have not used website

(152)

(637)(363)(1000)

2%

3%

9%

25%

46%

47%

79%

Total



Table 10c: Usage of ATO Products or Services in the Past 12 Months?Cross Usage

5%

4%

18%

30%

55%

61%

89%

Have used the

business tax

enquiries line

Have not used the

business tax

enquiries line

1%SME Tax Forum



2%

4%

22%

40%

74%

SME Communicator




Tax Office website

(637)(363)(1000)

2%

3%

9%

25%

46%

47%

79%

Total



Table 10c: Usage of ATO Products or Services in the Past 12 Months?Cross Usage

5%

4%

18%

30%

55%

61%

89%

Have used the

business tax

enquiries line

Have not used the

business tax

enquiries line

1%SME Tax Forum



2%

4%

22%

40%

74%

SME Communicator




Tax Office website

Page 47 of 116

In the table to follow, we look at usage of these tools by turnover segment.

Those in the larger turnover segments are more likely than the lower turnover segments to have used the

business portal, website and database (a finding in common with the 2008 results). We also note the

$100M to $250M segment shows greater reliance on the business tax enquiries line.

Below we examine usage of selected products or services by other variables. The results clearly show that

these services are popular with the financial professionals within the business and also by businesses who

have an internal accountant. Minimal or non-users of external tax professionals are slightly more likely to

use the legal database.

90%

71%

81%

84%

72%

61%

85%

79%

Website




(614)

(318)

(280)

(414)

(306)

(162)

(838)

(1000)

Base

#

36%43%55%57%**Financial professional

15%32%37%38%Owner/proprietor/chairman/CEO/company


ROLE IN COMPANY

Table 10f: Usage of ATO Products or Services in the Past 12 Months?by other variables

51%

50%

39%

26%

55%

47%

Business

Portal

Legal

Database

Enquiries

Line

Calculator/

Other

Tools

30%

27%

17%

5%

31%

25%

42%

38%

30%

31%

39%

37%

52%Moderate

41%Small/not at all

INTERNAL ACCOUNTANT

43%

25%

52%

46%

Substantial


No

Yes

TOTAL

90%

71%

81%

84%

72%

61%

85%

79%

Website




(614)

(318)

(280)

(414)

(306)

(162)

(838)

(1000)

Base

#

36%43%55%57%**Financial professional

15%32%37%38%Owner/proprietor/chairman/CEO/company


ROLE IN COMPANY

Table 10f: Usage of ATO Products or Services in the Past 12 Months?by other variables

51%

50%

39%

26%

55%

47%

Business

Portal

Legal

Database

Enquiries

Line

Calculator/

Other

Tools

30%

27%

17%

5%

31%

25%

42%

38%

30%

31%

39%

37%

52%Moderate

41%Small/not at all

INTERNAL ACCOUNTANT

43%

25%

52%

46%

Substantial


No

Yes

TOTAL

(101)(193)(300)(406)(1000)

13%

9%

37%

2%

3%

46%

25%

79%

47%

Total



Table 10e: Usage of ATO Products or Services in the Past 12 Monthsby turnover segment

14%

9%

37%

3%

3%

46%

24%

77%

45%

$2 to $10

million

$100 to $250

million

$50 to $100

million

$10 to $50

million

4%

11%

45%

1%

3%

39%

37%

94%

68%

4%

6%

36%

2%

3%

51%

37%

92%

62%



8%None used


3%

4%

44%

30%

55%

SME Tax Forum

SME Communicator




(101)(193)(300)(406)(1000)

13%

9%

37%

2%

3%

46%

25%

79%

47%

Total



Table 10e: Usage of ATO Products or Services in the Past 12 Monthsby turnover segment

14%

9%

37%

3%

3%

46%

24%

77%

45%

$2 to $10

million

$100 to $250

million

$50 to $100

million

$10 to $50

million

4%

11%

45%

1%

3%

39%

37%

94%

68%

4%

6%

36%

2%

3%

51%

37%

92%

62%



8%None used


3%

4%

44%

30%

55%

SME Tax Forum

SME Communicator




Page 48 of 116

Perceived Usefulness of ATO Products/Services

Users of each product or service were asked to rate its usefulness on a five point „Extremely useful‟ to „Not

at all useful‟ scale.

All of the products and services were rated as useful (to some degree) by a clear majority of users. The

services which were particularly strongly endorsed included:

the online calculators (rated as extremely or very useful by 65%)

the ATO business portal (64% extremely or very useful).

The ATO website was well regarded by most users – although a minority of 8% were negative in their

views. The legal database also received criticism from a small but significant minority (11%). The most

heavily criticized service was the tax enquiries line (17% rated as not useful).

24%

12%

11%

14%

17%

7%

12%

47%

40%

38%

35%

30%

21%

29%

15%

31%

31%

41%

46%

40%

48%

45%

50%

8%

11%

17%

7%

13%

19%

18%

4%

Extremely useful Very useful Fairly useful Not too/not at all usefull Don't know/Can't say




Table 11a: Usefulness of ATO Products/Services

Summary




Table 11a: Usefulness of ATO Products/Services

Summary




SME Tax Forum *(26)








SME Tax Forum *(26)





Page 49 of 116

The 2008 research also included ratings of a number of products. The two sets of results are not entirely

comparable because in 2010 a semantic scale was used while in 2008 a score out of ten was used.

However, we can compare the rank order of the common products or services rated in the two surveys.

As we can see, the rank order is consistent over the two survey waves.

Below we examine ratings of the products and services across the SME business segments based on the

proportion of respondents giving the rating as extremely/very useful. Note, that due to small sample sizes,

only the responses for the more commonly used services are shown. The indications are that the business

portal is rated more favourably by the $2 to $10 M and $10 to $50M segments; the calculators more

positively by the $2 to $10 million segment and the legal database by users in the $100 to $250 million

sector.

36%

65%

38%

50%

64%

Total


Note: * Small base



Table 11b: Usefulness of ATO Products/Servicesby turnover segment

37%

66%

38%

50%

65%

$2 to $10

million

$100 to $250

million

$50 to $100

million

$10 to $50


30%

*57%

46%

51%

54%

33%

56%

34%

44%

49%



57%

38%

61%




36%

65%

38%

50%

64%

Total


Note: * Small base



Table 11b: Usefulness of ATO Products/Servicesby turnover segment

37%

66%

38%

50%

65%

$2 to $10

million

$100 to $250

million

$50 to $100

million

$10 to $50


30%

*57%

46%

51%

54%

33%

56%

34%

44%

49%



57%

38%

61%




2008 vs. 2010


2008 vs. 2010



Online subscription

Website

Business portal

Online calculators

2008


Online subscription

Website

Business portal

Online calculators

2008


Online subscription

Website

Business portal

Online calculators

2010


Online subscription

Website

Business portal

Online calculators

2010

= rated

LOWEST RATED

HIGHEST RATED

Page 50 of 116

Channel Preference for Obtaining Information from the ATO

Respondents were asked to nominate their preferred method of obtaining information from the ATO.

There is clear preference for the ATO website with this channel being nominated by just over 50%.

The business portal and telephone contact are the only other two options to be preferred by more than

one in ten.

Across the turnover segments we note:

higher than average preference for the website amongst the larger concerns ($10m+)

lower than average preference for the business tax enquiries line amongst the $100 to $250 million

turnover business.

2%5%6%11%10%No preference

3%2%1%1%1%Through Tax Office seminars provided by

the Tax Office

4%7%6%5%5%Email from/to the Tax Office

2%2%2%5%4%Paper mail from/to the Tax Office

12%10%11%14%14%Tax Office business portal, which


8%12%10%16%15%By calling the Tax Office 13 28 66

business enquiry line

0%

52%

Total

(1000)

Base: Total sample


Table 12b: Channel Preference for Obtaining Information from the ATOby turnover segment

-

49%

$2 to $10

million

(406)

$100 to $250

million

(101)

$50 to $100

million

(193)

$10 to $50

million

(300)

-

69%

-

62%

1%

64%


Tax Office website

2%5%6%11%10%No preference

3%2%1%1%1%Through Tax Office seminars provided by

the Tax Office

4%7%6%5%5%Email from/to the Tax Office

2%2%2%5%4%Paper mail from/to the Tax Office

12%10%11%14%14%Tax Office business portal, which


8%12%10%16%15%By calling the Tax Office 13 28 66

business enquiry line

0%

52%

Total

(1000)

Base: Total sample


Table 12b: Channel Preference for Obtaining Information from the ATOby turnover segment

-

49%

$2 to $10

million

(406)

$100 to $250

million

(101)

$50 to $100

million

(193)

$10 to $50

million

(300)

-

69%

-

62%

1%

64%


Tax Office website

Table 12a: Channel Preference for Obtaining Information from the ATO

Summary



Tax Office website

By calling the Tax Office 13 28 66 business enquiry line


Email from/to the Tax Office

Paper mail from/to the Tax Office

Through Tax Office seminars provided by the Tax Office


No preference

15%

14%

5%

4%

1%

0%

10%

52%

Page 51 of 116

Have These Channel Preferences Changed Since 2008?

In the 2008 survey the list of preferences also included non-ATO channels. We have, therefore, re-

calculated both sets of findings to base the results only on those who actually nominated an ATO product.

Those with no preference have also been excluded from both sets of data.

As illustrated, there has been a lift in preference for the business portal and a decline in support for paper

communication.

In 2010 we have also seen a small lift in support for the business tax enquiries line.








Table 12c: Channel Preference for Obtaining Information from the ATOTrends

2010

(900)

2008

(619)

0%

58%

N/A

62%


Tax Office website








Table 12c: Channel Preference for Obtaining Information from the ATOTrends

2010

(900)

2008

(619)

0%

58%

N/A

62%


Tax Office website

Page 52 of 116

Section 5: Income Tax (PAYG)

Page 53 of 116

Is Business Part of the PAYG System?

Questions on PAYG were put to the 93% of businesses who answered „yes‟ to the question…

“Is this business part of the pay as you go system, known as PAYG?”

Some 5% of businesses claimed to not be part of the PAYG system whilst 2% weren‟t sure.

Whilst these figures do not vary greatly by turnover sector, we note that only about 80% of those

employing fewer than five people say that they are part of the PAYG system.

Base: Total sample

Q9a. Is this business part of the pay as you go system or PAYG?

Table 13: Part of the PAYG System

by business size

Base: Total sample

Q9a. Is this business part of the pay as you go system or PAYG?

Table 13: Part of the PAYG System

by business size

100+ employees (210)

20 to 99 employees (341)




Total (1,000)

100+ employees (210)





Total (1,000)

81%

95%

95%

97%

93%

93%

Page 54 of 116

Understanding of Income Tax (PAYG) Obligations

There is no real issue with understanding PAYG obligations with all but 6% saying they understand this

process well.

Knowledge levels are reasonably consistent across the turnover segments.



Table 14a: Understanding of PAYG Obligations Summary



Table 14a: Understanding of PAYG Obligations Summary

Not at all

well

1%

Well

35%

Not very

well

5%

Very well

59%

1%

2%

1%

0%

2%

2%

-

1%

2%

1%

Not at all

Well

(207)

(334)

(158)

(116)

(115)

(95)

(183)

(277)

(380)

(935)

Base

#



Q9b Overall how well do you understand this business‟s PAYG obligations?

Table 14b: Understanding of PAYG Obligations by business size

4%25%70%100+

Not Very

WellWellVery Well

4%

5%

5%

5%

3%

3%

5%

5%

5%

35%

36%

33%

37%

39%

31%

31%

36%

35%

59%20 to 99

EMPLOYEES

56%0 to 4

62%5 to 9

58%10 to 19

TURNOVER SEGMENT

57%

66%

64%

58%

59%





TOTAL

1%

2%

1%

0%

2%

2%

-

1%

2%

1%

Not at all

Well

(207)

(334)

(158)

(116)

(115)

(95)

(183)

(277)

(380)

(935)

Base

#




Table 14b: Understanding of PAYG Obligations by business size

4%25%70%100+

Not Very

WellWellVery Well

4%

5%

5%

5%

3%

3%

5%

5%

5%

35%

36%

33%

37%

39%

31%

31%

36%

35%

59%20 to 99

EMPLOYEES

56%0 to 4

62%5 to 9

58%10 to 19

TURNOVER SEGMENT

57%

66%

64%

58%

59%





TOTAL

Page 55 of 116

Knowledge levels are higher amongst businesses in the Professional/Scientific/Technical Services sector.

Minimal or non-users of external tax consultants are more likely to have a good knowledge of PAYG (hence

less reliance on external professionals). We also note that those who have had no recent contact with the

ATO are less conversant with PAYG issues than those who have.

1%

-

1%

2%

-

3%

2%

0%

1%

Not at all

Well

(172)

(137)

(53)

(112)

(84)

(122)

(114)

(141)

(935)

Base

#




Table 14c: Understanding of PAYG Obligations by business sector

Not Very

WellWellVery Well

5%

9%

5%

2%

4%

6%

6%

3%

5%

35%

22%

37%

37%

35%

35%

36%

37%

35%




Services

59%Other

SECTOR

61%

55%

56%

60%

59%

Retail

Wholesale

Construction

Manufacturing

TOTAL

1%

-

1%

2%

-

3%

2%

0%

1%

Not at all

Well

(172)

(137)

(53)

(112)

(84)

(122)

(114)

(141)

(935)

Base

#




Table 14c: Understanding of PAYG Obligations by business sector

Not Very

WellWellVery Well

5%

9%

5%

2%

4%

6%

6%

3%

5%

35%

22%

37%

37%

35%

35%

36%

37%

35%




Services

59%Other

SECTOR

61%

55%

56%

60%

59%

Retail

Wholesale

Construction

Manufacturing

TOTAL

1%

1%

1%

1%

1%

3%

1%

0%

2%

1%

1%

Not at all

Well

10%54%35%(80)Did not use

(581)

(287)

(846)

(339)

(247)

(397)

(291)

(139)

(796)

(935)

Base

#


7%36%56%Owner/proprietor/chairman/CEO/company secretary/ administrator

Base: PAYG Businesses




Table 14d: Understanding of PAYG Obligations by other variables

ROLE IN COMPANY

Not Very

WellWellVery Well

4%

6%

2%

6%

5%

7%

4%

5%

33%

31%

26%

36%

42%

40%

33%

35%


57%Moderate

69%Small/not at all


62%Phone

INTERNAL ACCOUNTANT

53%

52%

62%

59%

Substantial


No

Yes

TOTAL

1%

1%

1%

1%

1%

3%

1%

0%

2%

1%

1%

Not at all

Well

10%54%35%(80)Did not use

(581)

(287)

(846)

(339)

(247)

(397)

(291)

(139)

(796)

(935)

Base

#







Table 14d: Understanding of PAYG Obligations by other variables

ROLE IN COMPANY

Not Very

WellWellVery Well

4%

6%

2%

6%

5%

7%

4%

5%

33%

31%

26%

36%

42%

40%

33%

35%


57%Moderate

69%Small/not at all


62%Phone

INTERNAL ACCOUNTANT

53%

52%

62%

59%

Substantial


No

Yes

TOTAL

Page 56 of 116

Ease of Accessing Income Tax Information from the ATO

Most SMEs (74%) believe that they can easily obtain the PAYG information they require from the ATO and

just one in ten find this a less than easy task. However, if we exclude the „not sure‟ and „not required‟, we

see that 88% find the information easy to obtain and only 12% not easy.

Those in the largest of the four turnover segments are more likely to perceive the task as easy.



Table 15a: Ease of Accessing of PAYG Information from the ATOSummary



Table 15a: Ease of Accessing of PAYG Information from the ATOSummary

Not easily

10%

Not sure

7%

Not

required

9%

Easily

74%

7%

7%

6%

9%

9%

Not

Required

(86)

(166)

(197)

(154)

(603)

Base

#

Base: PAYG Businesses Note:



Table 15b: Ease of Accessing of PAYG Information from ATO by turnover segment

Not SureNot EasilyEasily

1%

3%

10%

7%

7%

5%

13%

8%

11%

10%

TURNOVER SEGMENT

87%

77%

77%

74%

74%





TOTAL

7%

7%

6%

9%

9%

Not

Required

(86)

(166)

(197)

(154)

(603)

Base

#

Base: PAYG Businesses Note:



Table 15b: Ease of Accessing of PAYG Information from ATO by turnover segment


1%

3%

10%

7%

7%

5%

13%

8%

11%

10%

TURNOVER SEGMENT

87%

77%

77%

74%

74%





TOTAL

Page 57 of 116

Need for More PAYG Information

In total 27% of SME businesses say that they would like more information on income tax from the ATO.

The SME businesses in the $10 to $50 million turnover segments demonstrated the highest information

requirement (33%), while the $100 to $250 million turnover segment demonstrated the lowest (19%

require more).



Table 16: Requirement for More ATO Sourced Information on PAYG

by turnover segment



Table 16: Requirement for More ATO Sourced Information on PAYG

by turnover segment





Total (935)





Total (935)

25%

33%

32%

19%

27%

Page 58 of 116

Recently Used Income Tax Information Sources

Tax professionals (70%) and ATO information sources (68% used at least one of the ATO website, business

portal or call centre) are used almost equally for sourcing PAYG information. The ATO website is, by far, the

most commonly used ATO tool in this regard.

Use of the ATO for PAYG information is higher amongst the SME businesses in the largest turnover

segment.

6%

7%

7%

6%

6%

None

Required

24%

14%

22%

18%

18%

Industry/

Professional

Body

71%

68%

72%

70%

70%

Accountant/

Tax Agent

76%

72%

68%

67%

68%

Total Tax

Office

(95)

(183)

(277)

(380)

(935)

Base

#




Table 17b: Recently Used PAYG Information Sources by turnover segment

Tax Office

Portal

Tax Office

Website

Tax Office

Call Centre

32%

35%

31%

28%

29%

71%

64%

62%

59%

60%

TURNOVER SEGMENT

15%

13%

14%

18%

17%

$100 to $250 million

turnover




TOTAL

6%

7%

7%

6%

6%

None

Required

24%

14%

22%

18%

18%

Industry/

Professional

Body

71%

68%

72%

70%

70%

Accountant/

Tax Agent

76%

72%

68%

67%

68%

Total Tax

Office

(95)

(183)

(277)

(380)

(935)

Base

#




Table 17b: Recently Used PAYG Information Sources by turnover segment

Tax Office

Portal

Tax Office

Website

Tax Office

Call Centre

32%

35%

31%

28%

29%

71%

64%

62%

59%

60%

TURNOVER SEGMENT

15%

13%

14%

18%

17%


turnover




TOTAL



Table 17a: Recently Used PAYG Information SourcesSummary



Table 17a: Recently Used PAYG Information SourcesSummary





Tax Office website






Tax Office website


60%

29%

18%

17%

6%

70%


source: 68%

Page 59 of 116

How Could the ATO Better Assist SMEs with Income Tax (PAYG) Compliance?

The majority of those who sourced the ATO for PAYG information were unable to nominate how the ATO

could improve their service. Most suggestions that were made tended to be of a fairly generic nature.

Base: PAYG Businesses who have used ATO services (654)

Q9f Is there anything specifically the Tax Office could do/could have done to better assist you or this business

with Income Tax compliance?

Table 18: How Could the ATO Better Assist SMEs with PAYG Compliance?

Base: PAYG Businesses who have used ATO services (654)


with Income Tax compliance?

Table 18: How Could the ATO Better Assist SMEs with PAYG Compliance?

Reduce taxes/make it easier to pay

Give more notice on changes/time to comply with

changes

More knowledgeable staff/call centre staff

More information/updates

Make it easier/less complicated

Better website/search engine/user friendly/easy to

navigate/ access what's needed/ the portal

Shorter waiting times on the phones/improved

phone system

Reduce taxes/make it easier to pay

Give more notice on changes/time to comply with

changes




Better website/search engine/user friendly/easy to

navigate/ access what's needed/ the portal

Shorter waiting times on the phones/improved

phone system

5%

4%

3%

3%

2%

2%

5%

Page 60 of 116

Section 6: Fringe Benefits Tax (FBT)

Page 61 of 116

Incidence of Payment of FBT

Questions on FBT were restricted to those who answered „yes‟ to the question:

“Does this business usually pay Fringe Benefits Tax, also called FBT?”

Overall, 44% of SME businesses usually pay FBT. Whilst this is below the 55% figure recorded in 2008, the

wording of the questions was slightly different.

In 2008 respondents were asked:

“…which of the following tax obligations does this business have with the Tax Office?”

…which could mean that those who occasionally pay FBT could have been included in the „yes‟ response.

As shown below, the proportion who pay FBT increases with turnover – peaking at 87% amongst the $100

to $250 million turnover category, and falling to 39% in the $2 to $10 million segment.

Base: Total sample

Q7a. Does this business usually pay Fringe Benefits Tax, also called FBT?

Table 19a: Payment of FBT

by turnover segment

Base: Total sample


Table 19a: Payment of FBT

by turnover segment





Total (1,000)





Total (1,000)

39%

65%

84%

87%

44%

Page 62 of 116

FBT is most commonly paid in the Rental/Hiring/Real Estate, Finance/Insurance services,

Professional/Scientific/Technical services and Manufacturing and Wholesale sectors; least so in

Construction.

Base: Total sample


Table 19b: Payment of FBT

by industry sector

Base: Total sample


Table 19b: Payment of FBT

by industry sector

Wholesale (129)

Other (184)

Retail (91)

Construction (122)

Manufacturing (146)

Professional/Scientific/Technical Services (144)

Financial/Insurance Services (125)

Rental/Hiring/Real Estate (59)

Total (1,000)

Wholesale (129)

Other (184)

Retail (91)

Construction (122)

Manufacturing (146)




Total (1,000)

65%

54%

53%

49%

47%

39%

33%

25%

44%

Page 63 of 116

Understanding of FBT Obligations

Those who pay FBT were asked to indicate how well they understand their business FBT obligations.

Whilst most (84%) say that they understand their FBT obligations „well‟ or „very well‟, only 45% fall in the

„very well‟ category. A sizeable 17% admit to limited or no understanding.

Analysis by turnover segment shows no significant differences with levels of understanding showing a high

degree of consistency.



Table 20a: Understanding of FBT Obligations Summary



Table 20a: Understanding of FBT Obligations Summary

Not at all

well

5%

Well

39%

Not very

well

12%Very well

45%

3%

3%

5%

6%

12%

3%

3%

4%

5%

5%

Not at all

Well

(197)

(246)

(82)

(47)

*(29)

(86)

(166)

(197)

(154)

(603)

Base

#

Base: Business pays FBT

Note: Horizontal percentages; *Small sample size


Table 20b: Understanding of FBT Obligations by business size

3%31%63%100+

Not Very

WellWellVery Well

10%

18%

13%

8%

2%

9%

10%

13%

12%

36%

46%

38%

46%

46%

34%

38%

39%

39%

50%20 to 99

EMPLOYEES

34%0 to 4

43%5 to 9

32%10 to 19

TURNOVER SEGMENT

49%

55%

47%

43%

45%





TOTAL

3%

3%

5%

6%

12%

3%

3%

4%

5%

5%

Not at all

Well

(197)

(246)

(82)

(47)

*(29)

(86)

(166)

(197)

(154)

(603)

Base

#

Base: Business pays FBT



Table 20b: Understanding of FBT Obligations by business size

3%31%63%100+

Not Very

WellWellVery Well

10%

18%

13%

8%

2%

9%

10%

13%

12%

36%

46%

38%

46%

46%

34%

38%

39%

39%

50%20 to 99

EMPLOYEES

34%0 to 4

43%5 to 9

32%10 to 19

TURNOVER SEGMENT

49%

55%

47%

43%

45%





TOTAL

Page 64 of 116

There are some quite significant variations by business industry sector, with the following sectors showing

a limited understanding:

manufacturing;

construction;

retail;

wholesale; and

professional/scientific/technical services

Conversely, those in the rental/hiring/real estate sector appear to feel particularly well informed, with 70%

indicating they understand their obligations „very well‟.

15%

6%

3%

7%

1%

1%

1%

9%

5%

Not at all

Well

(87)

(54)

(98)

(47)

(91)

(85)

(101)

*(40)

(603)

Base

#




Table 20c: Understanding of FBT Obligations by business sector

Not Very

WellWellVery Well

19%

17%

21%

10%

18%

11%

8%

1%

12%

38%

47%

44%

52%

46%

37%

38%

20%

39%

32%Retail

32%Manufacturing

30%Construction

28%Wholesale

SECTOR

35%

51%

53%

70%

45%

Professional/Scientific/Technical Services

Financial/Insurance Services

Other

Rental/Hiring/Real Estate

TOTAL

15%

6%

3%

7%

1%

1%

1%

9%

5%

Not at all

Well

(87)

(54)

(98)

(47)

(91)

(85)

(101)

*(40)

(603)

Base

#




Table 20c: Understanding of FBT Obligations by business sector

Not Very

WellWellVery Well

19%

17%

21%

10%

18%

11%

8%

1%

12%

38%

47%

44%

52%

46%

37%

38%

20%

39%

32%Retail

32%Manufacturing

30%Construction

28%Wholesale

SECTOR

35%

51%

53%

70%

45%


Financial/Insurance Services

Other

Rental/Hiring/Real Estate

TOTAL

Page 65 of 116

Understanding of FBT tends to be lower amongst those who do not have an internal accountant (which tend

to be smaller SME businesses) but higher amongst those who are non or minimal users of external tax

consultants.

2%

6%

16%

3%

6%

11%

3%

2%

13%

3%

5%

Not at all

Well

8%46%30%(41)Did not use

(446)

(120)

(561)

(217)

(130)

(275)

(198)

(50)

(554)

(603)

Base

#


16%37%42%Owner/proprietor/chairman/CEO/company secretary/administrator

Base: Business pays FBT (1000)Note: Horizontal percentages; **Includes Chief Financial Officer, Financial Controller/Director of Finance,

Financial Manager, Accountant, Bookkeeper Q7b Overall, how well do you understand this business‟s FBT obligations?

Table 20d: Understanding of FBT Obligations by other variables

ROLE IN COMPANY

Not Very

WellWellVery Well

12%

12%

5%

12%

16%

15%

11%

12%

38%

39%

28%

40%

45%

48%

37%

39%


45%Moderate

56%Small/not at all


43%Phone

INTERNAL ACCOUNTANT

37%

23%

48%

45%

Substantial


No

Yes

TOTAL

2%

6%

16%

3%

6%

11%

3%

2%

13%

3%

5%

Not at all

Well

8%46%30%(41)Did not use

(446)

(120)

(561)

(217)

(130)

(275)

(198)

(50)

(554)

(603)

Base

#


16%37%42%Owner/proprietor/chairman/CEO/company secretary/administrator


Financial Manager, Accountant, Bookkeeper Q7b Overall, how well do you understand this business‟s FBT obligations?

Table 20d: Understanding of FBT Obligations by other variables

ROLE IN COMPANY

Not Very

WellWellVery Well

12%

12%

5%

12%

16%

15%

11%

12%

38%

39%

28%

40%

45%

48%

37%

39%


45%Moderate

56%Small/not at all


43%Phone

INTERNAL ACCOUNTANT

37%

23%

48%

45%

Substantial


No

Yes

TOTAL

Page 66 of 116

Ease of Accessing FBT Information from the ATO

Those who pay FBT were asked to rate the ease of obtaining information from the ATO.

As we can see, the majority (61%) find the information easy to obtain. However, if we exclude the

respondents who selected „not sure‟ or „not required‟ in response to this question we find that 84% find the

information easily obtainable and 16% find it difficult to obtain.

Below we examine ease of accessing information by turnover segment.

As illustrated, those in the $100 to $250 million segment tend to be most satisfied with the ease of

obtaining information.



Table 21a: Ease of Accessing of FBT Information from ATOSummary



Table 21a: Ease of Accessing of FBT Information from ATOSummary

Not easily

11%

Not sure

12%

Not

required

16%Easily

61%

13%

11%

12%

18%

16%

Not

Required

(86)

(166)

(197)

(154)

(603)

Base

#



Q7c Can you easily get the FBT information from the Tax Office that you need?

Table 21b: Ease of Accessing of FBT Information from ATO by turnover segment


6%

9%

11%

13%

12%

9%

13%

12%

10%

11%

TURNOVER SEGMENT

72%

67%

66%

58%

61%





TOTAL

13%

11%

12%

18%

16%

Not

Required

(86)

(166)

(197)

(154)

(603)

Base

#




Table 21b: Ease of Accessing of FBT Information from ATO by turnover segment


6%

9%

11%

13%

12%

9%

13%

12%

10%

11%

TURNOVER SEGMENT

72%

67%

66%

58%

61%





TOTAL

Page 67 of 116

Further scrutiny of the results reveals that those whose role in the business falls into the financial

professionals category are more likely to find the information easy to obtain than those who are in more

general management roles as shown in the table below.

Trend data reflects a modest downturn on this measure since 2008 (though it should be noted the

questions in the two studies differed).

10%

26%

16%

Not

Required

(446)

(120)

(603)

Base

#




Table 21c: Ease of Accessing of FBT Information from ATO by financial versus non-financial professional


12%

12%

12%

12%

8%

11%

ROLE IN COMPANY

66%

54%

61%

Financial

Non-financial

TOTAL

10%

26%

16%

Not

Required

(446)

(120)

(603)

Base

#




Table 21c: Ease of Accessing of FBT Information from ATO by financial versus non-financial professional


12%

12%

12%

12%

8%

11%

ROLE IN COMPANY

66%

54%

61%

Financial

Non-financial

TOTAL


2008: To what extend do you agree/disagree that „I can easily get the FBT information from the Tax Office

that I need‟?

2010 – Q7b: Can you easily get the FBT information from the Tax Office that you need?

Table 21d: Ease of Accessing of FBT Information from ATO Trends rate as easy to obtain


2008: To what extend do you agree/disagree that „I can easily get the FBT information from the Tax Office

that I need‟?

2010 – Q7b: Can you easily get the FBT information from the Tax Office that you need?

Table 21d: Ease of Accessing of FBT Information from ATO Trends rate as easy to obtain

61%

66%

2008 2010

Page 68 of 116

Need for More FBT Information

All respondents with FBT obligations were asked if they would like more information on FBT from the ATO.

Some 40% would like more information, 56% would not, and 4% were undecided.

By turnover segment we note a greater desire for more FBT information from the $10 to $50 million and

$100 to $250 million segments.

A comparison with 2008 results reveals less requirement for ATO sourced information on FBT (although it

should be noted the questions in the two studies differed).


2008: To what extend do you agree/disagree that „I would like more FBT information from the ATO‟?

2010 – Q7d: Would you like more FBT information from the Tax Office?

Table 22b: Requirement for More ATO Sourced Information on FBT Trends


2008: To what extend do you agree/disagree that „I would like more FBT information from the ATO‟?

2010 – Q7d: Would you like more FBT information from the Tax Office?

Table 22b: Requirement for More ATO Sourced Information on FBT Trends

40%

54%

2008 2010

Base: Pay FBT


Table 22a: Requirement for More ATO Sourced Information on FBT

by turnover segment

Base: Pay FBT


Table 22a: Requirement for More ATO Sourced Information on FBT

by turnover segment





Total (603)





Total (603)

38%

48%

42%

46%

40%

Page 69 of 116

Recently Used FBT Information Sources

Respondents who pay FBT were asked to indicate the sources of information they have recently used for

FBT.

As illustrated below, some 95% have sought information – with the most common source being external

financial providers (74%). Overall, 59% used one or more ATO service (at least one of ATO website,

business portal or call centre). The website was the most frequent ATO channel used.

Those in the higher turnover segments are more likely to use the services of the ATO for FBT information

and less likely than all other segments to confer with accountants/tax agents. The $100 to $250 million

segment is also frequent users of industry or professional bodies.

4%

9%

5%

6%

5%

None

Required

46%

27%

22%

20%

21%

Industry/

Professional

Body

62%

60%

70%

76%

74%

Accountant/

Tax Agent

69%

70%

61%

57%

59%

Total Tax

Office

(86)

(166)

(197)

(154)

(603)

Base

#




Table 23b: Recently Used FBT Information Sources by turnover segment

Tax Office

Portal

Tax Office

Website

Tax Office

Call Centre

32%

27%

22%

20%

21%

63%

67%

56%

53%

54%

TURNOVER SEGMENT

16%

11%

10%

6%

7%


turnover




TOTAL

4%

9%

5%

6%

5%

None

Required

46%

27%

22%

20%

21%

Industry/

Professional

Body

62%

60%

70%

76%

74%

Accountant/

Tax Agent

69%

70%

61%

57%

59%

Total Tax

Office

(86)

(166)

(197)

(154)

(603)

Base

#




Table 23b: Recently Used FBT Information Sources by turnover segment

Tax Office

Portal

Tax Office

Website

Tax Office

Call Centre

32%

27%

22%

20%

21%

63%

67%

56%

53%

54%

TURNOVER SEGMENT

16%

11%

10%

6%

7%


turnover




TOTAL



Table 23a: Recently Used FBT Information SourcesSummary



Table 23a: Recently Used FBT Information SourcesSummary






Tax Office website







Tax Office website


54%

21%

21%

7%

2%

5%

74%


source: 59%

Page 70 of 116

How Could the ATO Better Assist SMEs with FBT Compliance?

Those who pay FBT and have sourced the ATO for information were asked if there was anything the ATO

could do to better assist with FBT compliance.

The majority (63%) were unable to come up with any recommendations and no one suggestion emerged

with any real degree of consistency.

Those who did comment, frequently made somewhat general suggestions:

more information

make it easier.

However, more specific ideas included:

guidelines and examples of how things work

a better website

more seminars, courses or workshops.

Base: Have used Tax Office for information on FBT (388)


with FBT compliance?

Table 24: How Could the ATO Better Assist SMEs with FBT Compliance?

Base: Have used Tax Office for information on FBT (388)


with FBT compliance?

Table 24: How Could the ATO Better Assist SMEs with FBT Compliance?

6%

6%

5%

5%

4%

4%

3%

2%

2%

12%

Give more notice on changes/time to comply with changes

Shorter waiting times on the phones/improved phone system

More seminars/courses/workshops

Send material in the post

Use email to provide information


Better website/search engine/user friendly/easy to navigate/ access what's needed/the portal


Issue guidelines/examples of how things work/a checklist/manual




More seminars/courses/workshops

Send material in the post



Better website/search engine/user friendly/easy to navigate/ access what's needed/the portal




Page 71 of 116

Section 7: Capital Gains Tax (CGT)

Page 72 of 116

Incidence of Involvement with CGT

Questions on CGT were asked for those respondents who:

reported a capital gain or loss in the 2008/09 financial year; and/or

expect to file a CGT return in the next two years.

Overall, 25% had reported a capital gain or loss in 2008/09 and 21% expected to file a CGT return in the

next couple of years. In net terms 31% qualified on either or both criteria.

As illustrated below those in the $50 to $100 million sector were somewhat less likely than all other

segments to have CGT obligations.

Those in the Rental/Hiring/Real Estate sector are most likely to have CGT obligations, while those in the

Professional/Scientific/Technical Services sector are least likely to do so.

(101)

(193)

(300)

(406)

(1000)

Base

#

Base: Total sample


Q8a Did this business report a capital gain or loss (also known as CGT) in the 2008/9 financial year?

Q8b. Do you expect to file a CGT return in the next two years?

Table 25a: Involvement in CGTby turnover segment

Net: Involved

Expect to file

CGT return in

next two years

Reported a

capital gain or

loss in 2008/9

25%

20%

26%

33%

31%

17%

17%

18%

22%

21%

TURNOVER SEGMENT

19%

10%

19%

27%

25%





TOTAL

(101)

(193)

(300)

(406)

(1000)

Base

#

Base: Total sample




Table 25a: Involvement in CGTby turnover segment

Net: Involved

Expect to file

CGT return in

next two years

Reported a

capital gain or

loss in 2008/9

25%

20%

26%

33%

31%

17%

17%

18%

22%

21%

TURNOVER SEGMENT

19%

10%

19%

27%

25%





TOTAL

31%24%23%(91)Manufacturing

33%25%26%(129)Financial/Insurance Services

34%22%30%(122)Other

54%32%47%(146)Rental/Hiring/Real Estate

(84)

(144)

(59)

(125)

(1000)

Base

#

Base: Total sample




Table 25b: Involvement in CGTby business sector

Net: Involved

Expect to file

CGT return in

next two years

Reported a

capital gain or

loss in 2008/9

21%

26%

26%

26%

31%

16%

19%

17%

13%

21%

INDUSTRY SECTOR

16%

18%

19%

23%

25%


Construction

Retail

Wholesale

TOTAL

31%24%23%(91)Manufacturing

33%25%26%(129)Financial/Insurance Services

34%22%30%(122)Other

54%32%47%(146)Rental/Hiring/Real Estate

(84)

(144)

(59)

(125)

(1000)

Base

#

Base: Total sample




Table 25b: Involvement in CGTby business sector

Net: Involved

Expect to file

CGT return in

next two years

Reported a

capital gain or

loss in 2008/9

21%

26%

26%

26%

31%

16%

19%

17%

13%

21%

INDUSTRY SECTOR

16%

18%

19%

23%

25%


Construction

Retail

Wholesale

TOTAL

Page 73 of 116

Understanding of CGT Obligations

A sizeable 33% of those with CGT obligations admit to not having a clear understanding of this subject.

Just 25% claim to understand the obligations „very well‟.

Analysis by business segment shows that those in the $50 to $100 million turnover segment appear to

have a better grasp of this subject.



Table 26a: Understanding of CGT Obligations Summary



Table 26a: Understanding of CGT Obligations Summary

Not at all

well

6%

Well

42%Not very

well

27%

Very well

25%

16%

6%

7%

4%

2%

-

10%

4%

6%

6%

Not at all

Well

(58)

(89)

(42)

*(31)

(42)

*(27)

*(38)

(73)

(125)

(263)

Base

#



Q8c Overall, how well do you understand this business‟s CGT obligations?

Table 26b: Understanding of CGT Obligations by business size

9%39%36%100+

Not Very

WellWellVery Well

28%

39%

26%

21%

6%

16%

26%

28%

27%

39%

44%

44%

45%

60%

26%

39%

42%

42%

27%20 to 99

EMPLOYEES

32%0 to 4

26%5 to 9

10%10 to 19

TURNOVER SEGMENT

34%

48%

31%

24%

25%





TOTAL

16%

6%

7%

4%

2%

-

10%

4%

6%

6%

Not at all

Well

(58)

(89)

(42)

*(31)

(42)

*(27)

*(38)

(73)

(125)

(263)

Base

#




Table 26b: Understanding of CGT Obligations by business size

9%39%36%100+

Not Very

WellWellVery Well

28%

39%

26%

21%

6%

16%

26%

28%

27%

39%

44%

44%

45%

60%

26%

39%

42%

42%

27%20 to 99

EMPLOYEES

32%0 to 4

26%5 to 9

10%10 to 19

TURNOVER SEGMENT

34%

48%

31%

24%

25%





TOTAL

Page 74 of 116

Further analysis reveals that the financial professionals in the SME business have, perhaps, predictably, a

greater understanding of CGT matters. Also, we note that those businesses which have no internal

accounting resources are less well versed on the subject.

2%

7%

11%

5%

6%

2%

2%

13%

6%

5%

6%

Not at all

Well

37%51%1%(38)Did not use

(146)

(101)

(220)

(96)

(61)

(115)

(87)

(59)

(205)

(263)

Base

#






Table 26c: Understanding of CGT Obligations by other variables

ROLE IN COMPANY

Not Very

WellWellVery Well

23%

29%

26%

29%

26%

30%

26%

27%

41%

37%

42%

47%

36%

48%

39%

42%


23%Moderate

30%Small/not at all


29%Phone

INTERNAL ACCOUNTANT

25%

16%

30%

25%

Substantial


No

Yes

TOTAL

2%

7%

11%

5%

6%

2%

2%

13%

6%

5%

6%

Not at all

Well

37%51%1%(38)Did not use

(146)

(101)

(220)

(96)

(61)

(115)

(87)

(59)

(205)

(263)

Base

#






Table 26c: Understanding of CGT Obligations by other variables

ROLE IN COMPANY

Not Very

WellWellVery Well

23%

29%

26%

29%

26%

30%

26%

27%

41%

37%

42%

47%

36%

48%

39%

42%


23%Moderate

30%Small/not at all


29%Phone

INTERNAL ACCOUNTANT

25%

16%

30%

25%

Substantial


No

Yes

TOTAL

Page 75 of 116

Ease of Accessing CGT Information from the ATO

Respondents were asked to rate the ease of obtaining CGT information from the ATO.

Some 57% felt that they could easily obtain the information they needed, and 16% said that this was not

an easy task.

If we exclude the „not sure‟ and „not required‟ responses, we find that 78% find the information easy to

obtain and 22% not easy.

Whilst we need to be wary of small sample sizes, the results suggest that those in the largest turnover

segment are more positive with regard to this issue.

-

22%

15%

11%

11%

Not

Required

*(27)

*(38)

(73)

(125)

(263)

Base

#


Note: Horizontal percentages; *Small sample


Table 27b: Ease of Accessing of CGT Information from ATO by turnover segment


6%

16%

19%

16%

16%

20%

9%

18%

16%

16%

TURNOVER SEGMENT

74%

53%

48%

58%

57%





TOTAL

-

22%

15%

11%

11%

Not

Required

*(27)

*(38)

(73)

(125)

(263)

Base

#




Table 27b: Ease of Accessing of CGT Information from ATO by turnover segment


6%

16%

19%

16%

16%

20%

9%

18%

16%

16%

TURNOVER SEGMENT

74%

53%

48%

58%

57%





TOTAL



Table 27a: Ease of Accessing of CGT Information from ATOSummary



Table 27a: Ease of Accessing of CGT Information from ATOSummary

Not easily

16%

Not sure

16%

Not

required

11%

Easily

57%

Page 76 of 116

Need for More CGT Information

When asked whether they would like more information on CGT, 35% replied in the affirmative. Sixty-three

percent require no further information and 2% are unsure.

Those in the $50 to $100 million turnover segment are least in need of additional support.



Table 28: Requirement for More ATO Sourced Information on CGT

By turnover segment



Table 28: Requirement for More ATO Sourced Information on CGT

By turnover segment





Total (263)





Total (263)

35%

40%

25%

46%

35%

Page 77 of 116

Recently Used CGT Information Sources

Some 74% have recently obtained CGT information from an external tax professional, and 47% have used

the ATO (mentioned at least one of ATO website, business portal or call centre) – most often the ATO

website. Industry or professional bodies have been a source of CGT information for 14%.

Across all turnover segments the proportion seeking advice from tax professionals considerably outweighs

the proportion directly using the ATO services.

4%

25%

10%

11%

11%

None

Required

8%

6%

21%

13%

14%

Industry/

Professional

Body

83%

63%

75%

74%

74%

Accountant/

Tax Agent

57%

37%

38%

48%

47%

Total Tax

Office

*(27)

*(38)

(73)

(125)

(263)

Base

#



Q8f Which of the following sources have you recently used for information on CGT?

Table 29b: Recently Used CGT Information Sources by turnover segment

Tax Office

Portal

Tax Office

Website

Tax Office

Call Centre

13%

6%

16%

11%

12%

56%

37%

32%

42%

41%

TURNOVER SEGMENT

12%

3%

4%

9%

8%


turnover




TOTAL

4%

25%

10%

11%

11%

None

Required

8%

6%

21%

13%

14%

Industry/

Professional

Body

83%

63%

75%

74%

74%

Accountant/

Tax Agent

57%

37%

38%

48%

47%

Total Tax

Office

*(27)

*(38)

(73)

(125)

(263)

Base

#




Table 29b: Recently Used CGT Information Sources by turnover segment

Tax Office

Portal

Tax Office

Website

Tax Office

Call Centre

13%

6%

16%

11%

12%

56%

37%

32%

42%

41%

TURNOVER SEGMENT

12%

3%

4%

9%

8%


turnover




TOTAL



Table 29a: Recently Used CGT Information SourcesSummary



Table 29a: Recently Used CGT Information SourcesSummary


Other




Tax Office website



Other




Tax Office website


41%

14%

12%

8%

1%

11%

74%


source: 47%

Page 78 of 116

How Could the ATO Better Assist SMEs with CGT Tax Compliance?

Those who have used ATO services were asked what the ATO could do better in the area of CGT. About

70% were unable to make any suggestions, with the most common responses summarised below.

Base: Business has filed CGT return in FY 2008/09 or expects to do so in next 2 years and has used ATO

services (117)

Q8j Is there anything specifically the Tax Office could do/could have done to better assist you or this business

with CGT compliance?

Table 30: How Could the ATO Better Assist SMEs with CGT Compliance?

Base: Business has filed CGT return in FY 2008/09 or expects to do so in next 2 years and has used ATO

services (117)

Q8j Is there anything specifically the Tax Office could do/could have done to better assist you or this business

with CGT compliance?

Table 30: How Could the ATO Better Assist SMEs with CGT Compliance?

Define/provide clear info on specifics.







Better website/search engine/user friendly/easy to navigate/ access what's needed/ the portal

Define/provide clear info on specifics.







Better website/search engine/user friendly/easy to navigate/ access what's needed/ the portal

6%

5%

4%

4%

4%

2%

2%

7%

Page 79 of 116

Usage of the “Guide to Capital Gains Tax” Publication

Just under a quarter have used the ATO electronic publication “Guide to Capital Gains Tax‟ available on the

ATO website, including half of the SME businesses in the $100 to $250 million segment.

Users were asked to rate the publication on the dimensions of usefulness and ease of navigation.

As illustrated, attitudes to the publication are reasonably positive. In terms of usefulness in helping the

business meet its CGT obligations 84% found the publication useful to some degree, and just over four in

ten found it extremely or very useful.

Ease of navigation does not appear to be a concern with 90% finding this, at least, fairly easy.

*(27)

*(38)

(73)

(125)

(263)

(Base)

#

Base: Have filed a CGT return in FY 2008/09 or expect to do so in the next 2 years (263)


Q8g Have you used the Tax Office electronic publication called, “Guide to Capital Gains Tax” available on the

Tax Office website?

Table 31: Usage of the “Guide to Capital Gains Tax” Publication by turnover segment

Can’t SayNot UsedUsed

7%

5%

4%

3%

3%

43%

63%

73%

75%

74%

TURNOVER SEGMENT

50%

33%

23%

23%

23%





TOTAL

*(27)

*(38)

(73)

(125)

(263)

(Base)

#

Base: Have filed a CGT return in FY 2008/09 or expect to do so in the next 2 years (263)


Q8g Have you used the Tax Office electronic publication called, “Guide to Capital Gains Tax” available on the

Tax Office website?

Table 31: Usage of the “Guide to Capital Gains Tax” Publication by turnover segment

Can’t SayNot UsedUsed

7%

5%

4%

3%

3%

43%

63%

73%

75%

74%

TURNOVER SEGMENT

50%

33%

23%

23%

23%





TOTAL

Base: Used publication (65)

Q8h How would you rate the usefulness of the publication in helping this business meet its CGT obligations?

Q8i How would you rate the publication in terms of ease of navigating through the site to access the

information you require? Is it…

Table 32: Attitudes Towards the Publication

Summary

Base: Used publication (65)


Q8i How would you rate the publication in terms of ease of navigating through the site to access the

information you require? Is it…

Table 32: Attitudes Towards the Publication

Summary

Usefulness in helping businesses meet CGT obligationsUsefulness in helping businesses meet CGT obligations

28% 43% 11% 5%13%

Extremely useful Very useful Fairly Useful Not too/not at all useful Can't say

Ease of navigating to access required informationEase of navigating to access required information

31% 50% 9%10%

Extremely easy Very easy Fairly easy Not too/not at all easy Can't say

Page 80 of 116

Section 8: A Comparison of PAYG, FBT and CGT Results

Page 81 of 116

Understanding of Tax Obligations

Whilst these three taxation areas are quite different it is of some interest to compare the levels of

understanding, perceived ease of access to information, perceived need for more information and use of

information sources.

In terms of understanding, it is clear that FBT and CGT are less well comprehended than PAYG.

Base: Have tax obligations (variable)


Q9b Overall how well do you understand this business‟s FBT/CGT/PAYG obligations?

Table 33: Understanding of Tax Obligations - Comparisons

Base: Have tax obligations (variable)


Q9b Overall how well do you understand this business‟s FBT/CGT/PAYG obligations?

Table 33: Understanding of Tax Obligations - Comparisons

84%

67%

59%

45%

42%

94%PAYG (935)

FBT (603)

CGT (263)

Well/extremely well Extremely well

Page 82 of 116

Ease of Accessing Tax Information from the ATO

Excluding the „not sure‟ and „not required‟ respondents, 88% find it easy to get the information on PAYG

that they need – placing PAYG the easiest business tax to obtain information on. CGT is the tax type where

information access is perceived to be least easy to access.

Base: Have tax obligations (variable) – excludes „not sure‟ and „not required‟


Q7b Can you easily get the PAYG/CGT/FBT information that you need from the Tax Office?

Table 34: Ease of Accessing Information from the ATO - Comparisons



Q7b Can you easily get the PAYG/CGT/FBT information that you need from the Tax Office?

Table 34: Ease of Accessing Information from the ATO - Comparisons

84%

78%

12%

16%

22%

88%PAYG (785)

FBT (434)

CGT (191)

Easy Not easy

Page 83 of 116

Need for More Tax Information

As illustrated below, FBT is the tax type which generates the greatest demand for more information; PAYG

the tax type which generates the least.



Q8d. Would you like more PAYG/CGT/FBT information from the Tax Office?

Table 35: Requirement for More Information from the ATO

Comparisons (require more)



Q8d. Would you like more PAYG/CGT/FBT information from the Tax Office?

Table 35: Requirement for More Information from the ATO

Comparisons (require more)

40%

35%

27%PAYG (935)

FBT (603)

CGT (263)

Page 84 of 116

Recently Used Tax Information Sources

The table below compares usage across the three tax categories. As illustrated, use of the ATO for sourcing

information tends to be lower for the more complex tax areas of CGT and FBT.

Base: Base: Have tax obligations (variable)


Q9e Which of the following sources, if any, have you recently used for information on PAYG/FBT/CGT?

Table 36: Recently Used Tax Information Sources - Comparisons

CGTFBTPAYG

11%

14%

74%

47%

12%

41%

8%

5%

21%

74%

59%

21%

54%

7%

68%Total Tax Office

70%Accountant/Tax Agent

18%Industry/Professional Body

7%None Required

17%Tax Office Call Centre

29%

60%

Tax Office Portal

Tax Office Website

Base: Base: Have tax obligations (variable)


Q9e Which of the following sources, if any, have you recently used for information on PAYG/FBT/CGT?

Table 36: Recently Used Tax Information Sources - Comparisons

CGTFBTPAYG

11%

14%

74%

47%

12%

41%

8%

5%

21%

74%

59%

21%

54%

7%

68%Total Tax Office

70%Accountant/Tax Agent

18%Industry/Professional Body

7%None Required

17%Tax Office Call Centre

29%

60%

Tax Office Portal

Tax Office Website

Page 85 of 116

Section 9: Tax Compliance

Page 86 of 116

Attitudes Towards Tax Compliance – Summary

Respondents were asked the extent to which they agreed with the following statements on the issue of tax

compliance:

“The complexity of the tax laws makes it difficult for businesses to comply with their tax

obligations”

“It is the responsibility of owners and directors to ensure their business is fully compliant

with tax obligations”

There is very strong opinion among SME businesses that the complexity of the tax laws makes it difficult

for them to comply with their tax obligations. Over two-thirds (68%) agree with this and just 26%

disagree.

Nevertheless, respondents almost invariably recognise that it is the business itself which has the onus to

ensure compliance. All but 4% agree that owners and directors have this responsibility.



compliance?

Table 37: Attitudes to Compliance Summary



compliance?

Table 37: Attitudes to Compliance Summary

31%

48%

65%

20%

2%

26%




obligations





obligations



Page 87 of 116

The Complexity of Tax Laws Make Compliance Difficult

Perceptions on the complexity of the tax laws and impact on compliance are broadly consistent across the

various turnover segments, with the $100 to $250 million segment showing the highest agreement with

this statement.

However, there are some differences by industry sector with those in manufacturing more likely and those

in retail less likely to support this view.

(84)

(144)

(59)

(125)

(91)

(129)

(122)

(146)

(1000)

Base

#

Base: Total sample


Q16 Do you strongly agree, agree, disagree or strongly disagree with the following statements about tax

compliance?

Table 38b: Attitudes to Compliance by business sector“The complexity of the tax laws makes it difficult for businesses to comply with their tax

obligations”


48%

34%

35%

53%

25%

37%

41%

52%

42%

22%

30%

31%

21%

34%

29%

26%

22%

26%




70%Other

SECTOR

59%

66%

67%

74%

68%

Retail

Wholesale

Construction

Manufacturing

TOTAL

(84)

(144)

(59)

(125)

(91)

(129)

(122)

(146)

(1000)

Base

#

Base: Total sample



compliance?

Table 38b: Attitudes to Compliance by business sector“The complexity of the tax laws makes it difficult for businesses to comply with their tax

obligations”


48%

34%

35%

53%

25%

37%

41%

52%

42%

22%

30%

31%

21%

34%

29%

26%

22%

26%




70%Other

SECTOR

59%

66%

67%

74%

68%

Retail

Wholesale

Construction

Manufacturing

TOTAL

47%

44%

41%

37%

44%

46%

36%

36%

43%

42%

Net agree

(210)

(341)

(168)

(121)

(153)

(101)

(193)

(300)

(406)

(1000)

Base

#

Base: Total sample



compliance?

Table 38a: Attitudes to Compliance by business size“The complexity of the tax laws makes it difficult for businesses to comply with their tax

obligations”

25%72%100+

DisagreeAgree

28%

26%

26%

24%

26%

32%

31%

25%

26%

72%20 to 99

EMPLOYEES

68%0 to 4

63%5 to 9

67%10 to 19

TURNOVER SEGMENT

72%

68%

67%

68%

68%





TOTAL

47%

44%

41%

37%

44%

46%

36%

36%

43%

42%

Net agree

(210)

(341)

(168)

(121)

(153)

(101)

(193)

(300)

(406)

(1000)

Base

#

Base: Total sample



compliance?

Table 38a: Attitudes to Compliance by business size“The complexity of the tax laws makes it difficult for businesses to comply with their tax

obligations”

25%72%100+

DisagreeAgree

28%

26%

26%

24%

26%

32%

31%

25%

26%

72%20 to 99

EMPLOYEES

68%0 to 4

63%5 to 9

67%10 to 19

TURNOVER SEGMENT

72%

68%

67%

68%

68%





TOTAL

Page 88 of 116

Those who have no internal accountant in the business are somewhat less likely to believe that the

complexity of tax laws make compliance difficult.

41%24%65%(92)Did not use

(614)

(318)

(896)

(363)

(280)

(414)

(306)

(162)

(838)

(1000)

Base

#



Base: Total sample Note: Horizontal percentages; **Includes Chief Financial Officer, Financial Controller/Director of Finance,

Financial Manager, Accountant, Bookkeeper Q16 Do you strongly agree, agree, disagree or strongly disagree with the following statements about tax

compliance?

Table 38c: Attitudes to Compliance by other variables“The complexity of the tax laws makes it difficult for businesses to comply with their tax

obligations”

ROLE IN COMPANY


40%

46%

43%

39%

46%

31%

45%

42%

27%

25%

26%

28%

24%

29%

25%

26%


67%Moderate

69%Small/not at all


71%Phone

INTERNAL ACCOUNTANT

70%

60%

70%

68%

Substantial


No

Yes

TOTAL

41%24%65%(92)Did not use

(614)

(318)

(896)

(363)

(280)

(414)

(306)

(162)

(838)

(1000)

Base

#



Base: Total sample Note: Horizontal percentages; **Includes Chief Financial Officer, Financial Controller/Director of Finance,

Financial Manager, Accountant, Bookkeeper Q16 Do you strongly agree, agree, disagree or strongly disagree with the following statements about tax

compliance?

Table 38c: Attitudes to Compliance by other variables“The complexity of the tax laws makes it difficult for businesses to comply with their tax

obligations”

ROLE IN COMPANY


40%

46%

43%

39%

46%

31%

45%

42%

27%

25%

26%

28%

24%

29%

25%

26%


67%Moderate

69%Small/not at all


71%Phone

INTERNAL ACCOUNTANT

70%

60%

70%

68%

Substantial


No

Yes

TOTAL

Page 89 of 116

It is the Responsibility of Owners and Directors to Ensure Their Business is Fully Compliant with Tax Obligations

Agreement with this statement is close to universal across the turnover segments falling in the high 90%

range within each.

Again, results are reasonably consistent across the business industry sectors – although those in Rental/

Hiring/Real Estate are less likely to strongly agree.

(210)

(341)

(168)

(121)

(153)

(101)

(193)

(300)

(406)

(1000)

Base

#

Base: Total sample



compliance?

Table 39a: Attitudes to Compliance by business size“It is the responsibility of owners and directors to ensure their business is fully compliant with

tax obligations”

91%38%100+

Total AgreeAgree strongly

95%

95%

100%

96%

100%

97%

95%

96%

96%

30%20 to 99

EMPLOYEES

29%0 to 4

32%5 to 9

33%10 to 19

TURNOVER SEGMENT

31%

34%

36%

30%

31%





TOTAL

(210)

(341)

(168)

(121)

(153)

(101)

(193)

(300)

(406)

(1000)

Base

#

Base: Total sample



compliance?

Table 39a: Attitudes to Compliance by business size“It is the responsibility of owners and directors to ensure their business is fully compliant with

tax obligations”

91%38%100+


95%

95%

100%

96%

100%

97%

95%

96%

96%

30%20 to 99

EMPLOYEES

29%0 to 4

32%5 to 9

33%10 to 19

TURNOVER SEGMENT

31%

34%

36%

30%

31%





TOTAL

(84)

(144)

(59)

(125)

(91)

(129)

(122)

(146)

(1000)

Base

#

Base: Total sample



compliance?

Table 39b: Attitudes to Compliance by business sector“It is the responsibility of owners and directors to ensure their business is fully compliant with

tax obligations”


92%

94%

94%

99%

98%

98%

95%

99%

96%




31%Other

SECTOR

34%

30%

31%

35%

31%

Retail

Wholesale

Construction

Manufacturing

TOTAL

(84)

(144)

(59)

(125)

(91)

(129)

(122)

(146)

(1000)

Base

#

Base: Total sample



compliance?

Table 39b: Attitudes to Compliance by business sector“It is the responsibility of owners and directors to ensure their business is fully compliant with

tax obligations”


92%

94%

94%

99%

98%

98%

95%

99%

96%




31%Other

SECTOR

34%

30%

31%

35%

31%

Retail

Wholesale

Construction

Manufacturing

TOTAL

Page 90 of 116

No significant differences are evident across the variables below, indicating that use of internal

accountants, external professionals, engagement with the ATO or role in business do not impact on

attitudes to this issue.


(614)

(318)

(896)

(363)

(280)

(414)

(306)

(162)

(838)

(1000)

Base

#



administrator

Base: Total sample




compliance?

Table 39c: Attitudes to Compliance by other variables“It is the responsibility of owners and directors to ensure their business is fully compliant with

tax obligations”

ROLE IN COMPANY


95%

95%

97%

96%

96%

98%

95%

96%


29%Moderate

35%Small/not at all


32%Phone

INTERNAL ACCOUNTANT

31%

25%

33%

31%

Substantial


No

Yes

TOTAL


(614)

(318)

(896)

(363)

(280)

(414)

(306)

(162)

(838)

(1000)

Base

#



administrator

Base: Total sample




compliance?

Table 39c: Attitudes to Compliance by other variables“It is the responsibility of owners and directors to ensure their business is fully compliant with

tax obligations”

ROLE IN COMPANY


95%

95%

97%

96%

96%

98%

95%

96%


29%Moderate

35%Small/not at all


32%Phone

INTERNAL ACCOUNTANT

31%

25%

33%

31%

Substantial


No

Yes

TOTAL

Page 91 of 116

Suggested Initiatives to Assist SME with Tax Compliance

In total some 57% made suggestions when asked what was the one thing the ATO could do to assist with

tax compliance.

It is little wonder, given responses to the statement relating to tax law complexity, that the most common

suggestion for assisting in tax compliance is simplifying the process, mentioned by 30% who responded to

this question (or 16% overall).

Typical comments on the issue of simplification were:

“Just simplifying the rules and just listen to what people say. If the Tax Office has

commissioned this survey they have to listen to people and I can only assume that many people

will say about simplifying.”

“Make compliance easier and less complex and eliminate FBT – I think this tax is unfair.”

“Make compliance easier and make reporting to the Tax Office simpler.”

“Simplification of tax rules – making them easier to understand and comply with.”


Q21 Apart from reducing the level of tax, what is the one thing the Tax Office could do to assist you or this

business with tax compliance?

Table 40: Suggested ATO Initiatives to Assist SMEs with Tax Compliance


Q21 Apart from reducing the level of tax, what is the one thing the Tax Office could do to assist you or this

business with tax compliance?

Table 40: Suggested ATO Initiatives to Assist SMEs with Tax Compliance

Extend deadlines/ payment/ lodgement terms

Simplify legislation

Provide seminars/ training/ awareness

More information

Make information easier to understand/ clearer/

simple

Simplify the process/less complex/ easier

Extend deadlines/ payment/ lodgement terms

Simplify legislation

Provide seminars/ training/ awareness

More information

Make information easier to understand/ clearer/

simple

Simplify the process/less complex/ easier

5%

4%

3%

3%

3%

16%

Page 92 of 116

Section 10: Broader Compliance Issues

Page 93 of 116

Phoenix Activities

Respondents were asked a number of questions about „Phoenix business‟ which were described in the

survey as.

“Businesses that go bankrupt leaving unpaid creditors then re-emerging under a different

name the next day.”

The table below summaries responses.

Relatively few SME businesses (34%) are aware that the ATO is targeting Phoenix businesses. This level of

awareness is consistent across the turnover segments (and also by location and industry sector, not

shown).

Amongst those who are aware of the ATO actions, there is widespread support with 93% in favour and just

3% against.

However, not all are convinced that the ATO is doing a good job in this area, with just 32% agreeing that

this is the case and 39% disagreeing.

53%38%39%31%32%Total Agree

21%42%31%41%39%Total Disagree

0%7%1%4%3%No

100%93%96%93%93%Yes

(33)(64)(101)(129)(327)(If Aware) Should the Tax Office be taking

action to curb Phoenix activities?

26%37%30%29%29%Can‟t Say

16%

23%

27%

5%

(327)

66%

34%

(1000)

Total

Table 41: Phoenix Activitiesby turnover segment

18%

23%

25%

6%

(129)

65%

34%

(406)

$2 to $10

million

$100 to $250

million

$50 to $100

million

$10 to $50

million

2%

19%

47%

6%

(33)

63%

37%

(101)

5%

20%

36%

2%

(64)

63%

35%

(193)

25%Disagree

6%Strongly Disagree

32%Yes

36%

3%

(101)

68%

(300)

Agree

Agree strongly

(If Aware) To what extent do you agree or

disagree that the Tax Office is doing an

effective job curbing Phoenix activities?

No

Awareness of Tax Office activities

targeting Phoenix Businesses?

53%38%39%31%32%Total Agree


0%7%1%4%3%No

100%93%96%93%93%Yes

(33)(64)(101)(129)(327)(If Aware) Should the Tax Office be taking

action to curb Phoenix activities?

26%37%30%29%29%Can‟t Say

16%

23%

27%

5%

(327)

66%

34%

(1000)

Total

Table 41: Phoenix Activitiesby turnover segment

18%

23%

25%

6%

(129)

65%

34%

(406)

$2 to $10

million

$100 to $250

million

$50 to $100

million

$10 to $50

million

2%

19%

47%

6%

(33)

63%

37%

(101)

5%

20%

36%

2%

(64)

63%

35%

(193)

25%Disagree

6%Strongly Disagree

32%Yes

36%

3%

(101)

68%

(300)

Agree

Agree strongly

(If Aware) To what extent do you agree or

disagree that the Tax Office is doing an

effective job curbing Phoenix activities?

No

Awareness of Tax Office activities

targeting Phoenix Businesses?

Page 94 of 116

Corporate Governance

After respondents were given the corporate governance introduction.

“There is a lot of focus these days on good corporate governance, that is the responsibility of

business proprietors and directors to fully meet their legal and ethical obligations.”

…respondents were asked if they were personally involved in aspects of the business requiring them to

have responsibility for corporate governance.

Close to six in ten (58%) have this responsibility, 38% do not have a corporate governance role, and 4%

didn‟t know.

Those with corporate governance responsibility were asked the extent to which they agreed or disagreed

with three statements on this subject.

As illustrated, almost all agree that they have a „good knowledge‟ of their corporate governance

responsibilities (92%) and that tax compliance is a part of this responsibility (96% agree).

However, views are more mixed on the issue of whether corporate governance offers any benefits to the

business. Whilst 35% believe that it does not, and is merely an administrative burden, 60% do not share

this view.

Base: Responsibility for Corporate Governance (596)

Q6a Do you strongly agree, agree, disagree or strongly disagree with the following statements about corporate

governance?

Table 42a: Attitudes to Corporate Governance Summary

Base: Responsibility for Corporate Governance (596)

Q6a Do you strongly agree, agree, disagree or strongly disagree with the following statements about corporate

governance?

Table 42a: Attitudes to Corporate Governance Summary

42%

7%

63%

54%

28% 60%

29%

2%

6%


Corporate governance does not offer any benefits

to this business, it is just another administrative

burden

It is part of my corporate governance responsibility

to ensure I comply with all aspects of the tax

regulations

I believe I have a good knowledge of my corporate

governance responsibilities

Corporate governance does not offer any benefits

to this business, it is just another administrative

burden

It is part of my corporate governance responsibility

to ensure I comply with all aspects of the tax

regulations

I believe I have a good knowledge of my corporate

governance responsibilities

Page 95 of 116

Below we examine attitudes by turnover segment.

Whilst there is agreement across the board on the first two statements, the issue of whether corporate

governance offers benefits to the businesses varies substantially across the turnover segments.

Businesses in the $2 to $10 million and $10 to $50 million segments are significantly more likely to

perceive corporate governance as a negative („administrative burden‟) than the higher turnover segments.

(55)(129)(181)(231)(596)Base


6%14%30%37%35%Total Agree


100%99%92%97%96%Total Agree


100%97%97%90%92%Total Agree

Base: Responsibility for Corporate Governance?Q15 Do you strongly agree, agree, disagree or strongly disagree with the following statements about corporate

governance?

Corporate governance does not offer any benefits to this business, it is just another administrative burden

I believe I have a good knowledge of my corporate governance responsibilities

Total

Table 42b: Attitudes to Corporate Governance by turnover segment

$2 to $10Million


$50 to $100 million

$10 to $50million

It is part of my corporate governance responsibility to ensure I comply with all aspects of the tax regulations

(55)(129)(181)(231)(596)Base


6%14%30%37%35%Total Agree


100%99%92%97%96%Total Agree


100%97%97%90%92%Total Agree

Base: Responsibility for Corporate Governance?Q15 Do you strongly agree, agree, disagree or strongly disagree with the following statements about corporate

governance?

Corporate governance does not offer any benefits to this business, it is just another administrative burden

I believe I have a good knowledge of my corporate governance responsibilities

Total

Table 42b: Attitudes to Corporate Governance by turnover segment

$2 to $10Million


$50 to $100 million

$10 to $50million

It is part of my corporate governance responsibility to ensure I comply with all aspects of the tax regulations

Page 96 of 116

International Dealings

Overall, 25% of the sample have international dealings of some type. This proportion rises to 62% of SME

businesses in the $100 to $250 million segment.

Businesses in the wholesale and manufacturing sectors are most likely to have international dealings while

businesses in the rental/hiring/real estate and construction sectors the least likely.


Q17a Does this business deal internationally through exporting, importing, running businesses off-shore, having

off-shore investments and the like?

Table 43a: International Dealingsby turnover segment




Table 43a: International Dealingsby turnover segment





Total (1000)





Total (1000)

23%

32%

46%

62%

25%




Table 43b: International Dealingsby industry sector




Table 43b: International Dealingsby industry sector


Retail (91)


Construction (122)

Other (184)


Manufacturing (146)

Wholesale (129)

Total (1,000)


Retail (91)


Construction (122)

Other (184)


Manufacturing (146)

Wholesale (129)

Total (1,000)

59%

44%

25%

25%

23%

21%

7%

4%

25%

Page 97 of 116

The 25% who do engage in international activity were asked what type of information from the ATO would

be of assistance in international dealings.

The majority (approximately 70%) were unable to suggest any areas in which the ATO could assist.

Amongst those respondents who did offer a suggestion, the common requests were:

GST implications;

general information or guidelines; and

information on duty or customs

Base: Have international dealings (360)

Q17b What type of information from the Tax Office, if any, would be of assistance to this business in addressing

the tax aspects of international dealings?

Table 44: Help required from the ATO to assist with International Dealings

Base: Have international dealings (360)

Q17b What type of information from the Tax Office, if any, would be of assistance to this business in addressing

the tax aspects of international dealings?

Table 44: Help required from the ATO to assist with International Dealings

Information with regard to tax laws/legislation

Import tax

Withholding tax

More case studies/examples

Export tax

Transfer pricing

Information regarding tax treaties

International compliance/ tax rules/ transactions

Information regarding duty/customs

General information/clear information/guidelines

GST implications

Information with regard to tax laws/legislation

Import tax

Withholding tax

More case studies/examples

Export tax

Transfer pricing

Information regarding tax treaties

International compliance/ tax rules/ transactions

Information regarding duty/customs

General information/clear information/guidelines

GST implications

5%

5%

3%

3%

3%

2%

2%

2%

2%

2%

6%

Page 98 of 116

Business Exist/Succession Planning

Some 40% of SME businesses covered by the survey have some form of succession plan in place – with

this being somewhat more likely amongst the $10 to $50 million and $50 to $100 million segments.

Just under eight in ten (77%) of those with a succession plan say that the exit strategy includes taxation

obligations or consequences.

Overall, about 30% of all businesses have a tax plan of sorts for succession planning.

19%22%14%15%15%No

67%63%78%78%77%Yes

(42)(93)(138)(150)(423)(If Exit Strategy) Does plan include

taxation obligations/consequences?

8%

44%

40%

(1000)

Total

Base: Total sample

Q18a Do the owners of this business have an exit strategy or succession plan?

Q18b Does this plan or strategy include taxation obligations and consequences?

Table 45: Business Exits/Succession Planningby turnover segment

8%

47%

38%

(406)

$2 to $10

million

$100 to $250

million

$50 to $100

million

$10 to $50

million

14%

30%

44%

(101)

14%

29%

51%

(193)

47%Yes

9%

36%

(300)

Not sure

No

Do owners have exit strategy/succession

plan?

19%22%14%15%15%No

67%63%78%78%77%Yes

(42)(93)(138)(150)(423)(If Exit Strategy) Does plan include

taxation obligations/consequences?

8%

44%

40%

(1000)

Total

Base: Total sample



Table 45: Business Exits/Succession Planningby turnover segment

8%

47%

38%

(406)

$2 to $10

million

$100 to $250

million

$50 to $100

million

$10 to $50

million

14%

30%

44%

(101)

14%

29%

51%

(193)

47%Yes

9%

36%

(300)

Not sure

No

Do owners have exit strategy/succession

plan?

Page 99 of 116

Trusts

Overall, 15% of the businesses included in the survey operate as a trust – with the incidence being skewed

towards the lower turnover segments.

The incidence of trusts peaks in the Rental/Hiring/Real Estate, Financial/Insurance Services, and

Construction sectors.

Base: Total sample

Q19a Does this business operate as a trust?

Table 46a: Trust statusby turnover segment

Base: Total sample


Table 46a: Trust statusby turnover segment





Total (1000)





Total (1000)

15%

13%

9%

7%

15%

Base: Total sample


Table 46b: Trust Statusby industry sector

Base: Total sample


Table 46b: Trust Statusby industry sector

21%

19%

18%

15%

14%

13%

10%

3%

15%

Retail (91)


Manufacturing (146)

Wholesale (129)

Other (184)

Construction (122)



Total (1,000)

Retail (91)


Manufacturing (146)

Wholesale (129)

Other (184)

Construction (122)



Total (1,000)

Page 100 of 116

Those who had trust status were asked if they had sought advice about trust obligations from specialists in

this field. A clear majority, 85%, had done so.

Base: Operate as a trust (112)

Q19b Has this business sought advice about trust obligations from specialists in this field?

Table 47: Has Business Sought Advice About Trust Obligations?

Base: Operate as a trust (112)


Table 47: Has Business Sought Advice About Trust Obligations?

Not

sought

advice

11%

Not sure

5%

Sought

advice

85%

Page 101 of 116

Capital Management

The issue of capital management was introduced to respondents as follows.

“This section is about using business funds for private purposes such as payments, loans and

advances to share holders. This may not apply to this business’s arrangements.”

Firstly, respondents were asked if they were aware of the tax status of such activities.

As illustrated, whilst 73% were aware that such financial arrangements are treated as taxable income, a

high 21% were not aware of this and 6% were unsure.

Awareness levels are reasonably consistent across the turnover segments and by other key variables as

shown below and overleaf.


Q20a Payments, loans and advances made to shareholders are normally treated as taxable income. Before

today were you aware of this?

Table 48a: Awareness that Payments, Loans and Advances Made to

Shareholders are Normally Treated as Taxable Income




Table 48a: Awareness that Payments, Loans and Advances Made to

Shareholders are Normally Treated as Taxable Income

Not

aware

21%

Not sure

6%

Aware

73%

3%

6%

8%

5%

6%

Not sure

(101)

(193)

(300)

(406)

(1000)

Base

#

Base: Total sample



Table 48b: Awareness that Payments, Loans and Advances Made to

Shareholders are Normally Treated as Taxable Income by turnover segment

Not awareAware

18%

22%

21%

21%

21%

SEGMENT

79%

72%

71%

74%

73%





TOTAL

3%

6%

8%

5%

6%

Not sure

(101)

(193)

(300)

(406)

(1000)

Base

#

Base: Total sample



Table 48b: Awareness that Payments, Loans and Advances Made to

Shareholders are Normally Treated as Taxable Income by turnover segment

Not awareAware

18%

22%

21%

21%

21%

SEGMENT

79%

72%

71%

74%

73%





TOTAL

Page 102 of 116

Those aware of the tax status of payments, loans and advances, were asked what steps, if any, can be

taken to avoid tax implications.

A high proportion didn‟t know (42%), or felt that there are no steps which can be taken (19%).

The use of loan agreements was the action most often nominated.

Base: Aware that payments, loans and advances made to shareholders are normally treated as taxable income

(737)

Q20b What steps if any can be taken to avoid a tax implication if drawing on company funds for payments,

loans or advances?

Table 49: Steps Taken to Avoid a Tax Implication if Drawing on Company

Funds for Payments, Loans or Advances


(737)

Q20b What steps if any can be taken to avoid a tax implication if drawing on company funds for payments,

loans or advances?

Table 49: Steps Taken to Avoid a Tax Implication if Drawing on Company

Funds for Payments, Loans or Advances

None

Don‟t know

Loan agreements/contracts in place/division 7a

Tax withheld/franked payments

Remaining fully compliant with regulations/law

Take it out/pay it as wages/salary/draw a wage

Segregation of private and personal issues

Consider as dividends/pay dividends to cover it

Ensure all people are informed/understand implications

Make sure the paperwork is correct/well documented

Get the right advice/refer it to tax accountant

Avoid it in the first place/don't do it/internal policy

Loan agreements

None

Don‟t know

Loan agreements/contracts in place/division 7a

Tax withheld/franked payments

Remaining fully compliant with regulations/law

Take it out/pay it as wages/salary/draw a wage

Segregation of private and personal issues

Consider as dividends/pay dividends to cover it

Ensure all people are informed/understand implications

Make sure the paperwork is correct/well documented

Get the right advice/refer it to tax accountant

Avoid it in the first place/don't do it/internal policy

Loan agreements

19%

11%

7%

5%

4%

3%

3%

3%

2%

2%

2%

2%

42%

18%

23%

24%

20%

17%

24%

17%

23%

24%

20%

21%

Not aware


(614)

(318)

(896)

(363)

(280)

(414)

(306)

(162)

(838)

(1000)

Base

#


5%73%

Owner/proprietor/chairman/CEO/company secretary/

administrator

Base: Total sample





Table 48c: Awareness that Payments, Loans and Advances Made to

Shareholders are Normally Treated as Taxable Income by other variables

ROLE IN COMPANY

Not sureAware

6%

6%

10%

3%

6%

%

8%

5%

6%


80%Moderate

67%Small/not at all


77%Phone

INTERNAL ACCOUNTANT

71%

68%

75%

73%

Substantial


No

Yes

TOTAL

18%

23%

24%

20%

17%

24%

17%

23%

24%

20%

21%

Not aware


(614)

(318)

(896)

(363)

(280)

(414)

(306)

(162)

(838)

(1000)

Base

#


5%73%

Owner/proprietor/chairman/CEO/company secretary/

administrator

Base: Total sample





Table 48c: Awareness that Payments, Loans and Advances Made to

Shareholders are Normally Treated as Taxable Income by other variables

ROLE IN COMPANY

Not sureAware

6%

6%

10%

3%

6%

%

8%

5%

6%


80%Moderate

67%Small/not at all


77%Phone

INTERNAL ACCOUNTANT

71%

68%

75%

73%

Substantial


No

Yes

TOTAL

Page 103 of 116

Accountants or tax agents (71%) are by far the predominant source for information in this area. Just 14%

nominated the ATO or its website.


(737)

Q20c Where might you go for information on how to avoid tax implications when drawing on company funds?

Table 50: Sources of Information on How to Avoid a Tax Implication if

Drawing on Company Funds for Payments, Loans or Advances


(737)


Table 50: Sources of Information on How to Avoid a Tax Implication if

Drawing on Company Funds for Payments, Loans or Advances

Tax manuals/publications/ legislation

Not applicable/we would not do this

Nowhere, would do it in-house

Lawyer

Professional Body

ATO/tax website

Accountant/Tax Agent

Tax manuals/publications/ legislation

Not applicable/we would not do this

Nowhere, would do it in-house

Lawyer

Professional Body

ATO/tax website

Accountant/Tax Agent

14%

3%

3%

2%

1%

1%

71%

Page 104 of 116

Section 11: External Tax Professionals – Usage and Satisfaction

Page 105 of 116

Use of External Tax Professionals

As illustrated below, 91% make use of external tax professionals for tax advice or planning, consistent with

the 2008 data (94%).

A minority of 28% make substantial use of these bodies.

Usage of external tax professionals does not vary greatly across the turnover segments – although,

predictably, those without an internal accountant/bookkeeper (25% of businesses) are more likely to make

substantial use of externals than those with in-house resources.

Internal accountant/

bookkeeper usedTurnover segment

Total

11%

25%

31%

34%

(162)

No

9%

21%

44%

26%

(838)

Yes

(101)(193)(300)(406)(1000)Base

9%

22%

41%

28%

Base: Total sample

Q4c To what extent does this business use external tax professionals for tax advice and planning?

Table 51b: Extent to Which External Tax Professionals Usedby turnover segment and use of internal bookkeeper

11%

22%

40%

27%

$2 to $10

million

$100 to

$250

million

$50 to

$100

million

$10 to

$50

million

5%

21%

45%

29%

4%

19%

40%

37%

5%

21%

44%

31%

Not at all

A small amount

Moderately

Substantially



Total

11%

25%

31%

34%

(162)

No

9%

21%

44%

26%

(838)

Yes

(101)(193)(300)(406)(1000)Base

9%

22%

41%

28%

Base: Total sample


Table 51b: Extent to Which External Tax Professionals Usedby turnover segment and use of internal bookkeeper

11%

22%

40%

27%

$2 to $10

million

$100 to

$250

million

$50 to

$100

million

$10 to

$50

million

5%

21%

45%

29%

4%

19%

40%

37%

5%

21%

44%

31%

Not at all

A small amount

Moderately

Substantially



Table 51a: Extent to Which External Tax Professionals Used Summary



Table 51a: Extent to Which External Tax Professionals Used Summary

Not at all

9%

Moderately

41%

Small

22%

Substantially

28%Total Use 2010 = 91%

Total Use 2008 = 94%

Page 106 of 116

Types of External Tax Professionals Used

Most of those using external tax professionals use accountants (88%), with 31% relying on tax agents and

10% bookkeepers. Whilst in 2008 the usage incidence for each of these tax professionals is higher, the

rank order is identical.

Although accountants are the predominant source in each segment, tax agents are more likely to be used

by the $10 million plus turnover businesses and less likely to be consulted by businesses with no internal

accounting resources.

Base: Use external tax professionals (938)

Q4d. Which, if any, of the following external tax professionals does this business use to manage some or all

business tax obligations?

Table 52a: Types of External Tax Professionals Used

Summary




Table 52a: Types of External Tax Professionals Used

Summary

Auditor

Tax lawyer/solicitor

Salary package service provider

Bookkeeper

Tax agent

Accountant/chartered accountant

Auditor

Tax lawyer/solicitor


Bookkeeper

Tax agent

Accountant/chartered accountant

59%

23%

9%

88%

31%

10%

4%

2%

1%

99%

2008 2010

-

-



3%

9%

20%

98%

(146)

No

4%

10%

34%

85%

(793)

Yes

(97)(187)(284)(370)(938)

4%

10%

31%

88%

Total

Base: Use external tax professionals



Table 52b: Types of External Tax Professionals Used by turnover segment

3%

11%

28%

90%

$2 to

$10

million

$100 to

$250

million

$50 to

$100

million

$10 to

$50

million

5%

4%

54%

71%

6%

4%

42%

84%

7%

4%

42%

82%


Bookkeeper

Tax agent

Accountant



3%

9%

20%

98%

(146)

No

4%

10%

34%

85%

(793)

Yes

(97)(187)(284)(370)(938)

4%

10%

31%

88%

Total

Base: Use external tax professionals



Table 52b: Types of External Tax Professionals Used by turnover segment

3%

11%

28%

90%

$2 to

$10

million

$100 to

$250

million

$50 to

$100

million

$10 to

$50

million

5%

4%

54%

71%

6%

4%

42%

84%

7%

4%

42%

82%


Bookkeeper

Tax agent

Accountant

Page 107 of 116

Satisfaction with External Tax Professionals

Satisfaction levels with external tax professionals are high – with 72% being „extremely‟ or „very satisfied‟

and most of the balance „fairly satisfied‟. Only 1% expressed any level of dissatisfaction.

Results suggest the SME businesses rate accountants and tax agents similarly, and both are rated more

favourably than bookkeepers.


Q4c How satisfied are you with the advice you received from your external tax professionals?

Table 53a: Satisfaction with External Tax Professional Summary



Table 53a: Satisfaction with External Tax Professional Summary

Can't say

3%

Not too/not at all

satisfied

1%

Very satisfied

44%

Fairly satisfied

23%

Extremely

satisfied

28%

62%73%74%72%Extremely/very satisfied

3%1%2%3%Can‟t say

(70)(362)(785)(938)Base

1%

23%

44%

28%

Total

Base: Base: Use external tax professionals


Table 53b: Satisfaction with External Tax Professional by tax professional category

2%

22%

45%

29%

Accountant BookkeeperTax agent

2%

33%

29%

33%

1%

26%

47%

26%

Not too/not at all satisfied

Fairly satisfied

Very satisfied

Extremely satisfied

62%73%74%72%Extremely/very satisfied

3%1%2%3%Can‟t say

(70)(362)(785)(938)Base

1%

23%

44%

28%

Total

Base: Base: Use external tax professionals


Table 53b: Satisfaction with External Tax Professional by tax professional category

2%

22%

45%

29%

Accountant BookkeeperTax agent

2%

33%

29%

33%

1%

26%

47%

26%

Not too/not at all satisfied

Fairly satisfied

Very satisfied

Extremely satisfied

Page 108 of 116

APPENDIX 1: Trends in the Economic Health of the SME Sector (200 Employees or Less) Sourced from Sensis ® Business Index*

* The Sensis ® Business Index is an initiative of Sensis, the directories arm of Telstra. The Index was developed to

provide industry and Government with an ongoing measure of the economic health in the small and medium business

sector.

The survey covers all non-primary industry businesses employing up to 200 staff.

Page 109 of 116

Trends in Business Confidence

Since 1993 Sweeney Research have been monitoring the economic health of the small and medium

business sector (less than 200 employees) in Australia. The Sensis ® Business Index involves interviews

with 1,800 business proprietors each quarter and examines confidence in their business prospects for the

year ahead, expectations for the economy and, experiences and expectations across a range of key

business indicators. A selection of key highlights from the Sensis ® Business Index is discussed in the

pages to follow to provide some additional insights into the SME sector from a broader commercial

perspective.

One of the core questions in this survey is…

“Thinking about the next 12 months, how confident do you feel about your business

prospects?”

Trends over the past eight years are shown below.

The February Sensis 2009 survey registered the lowest level of business confidence since the survey began

in 1993. At this time, only 45% were confident about their business prospects and 33% were worried. At

12% the net balance (the difference between the percentage who are confident and the percentage who

are worried) was one-third the peak levels recorded in 2004. Since that time there has been resurgence in

confidence – testament to the resilience of the SME business community.

The May 2009 Sensis survey recorded the biggest quarterly rise in confidence since the survey began –

only to be exceeded in August 2009. In the latest (February 2010) survey, 65% were confident about their

future and only 15% were worried.

Of course the SME sector is far from homogenous when it comes to business confidence.

%

10%

20%

30%

40%

50%

60%

70%

80%

Aug-0

2N

ov-

02

Feb-

03

May-

03

Aug-

03

Nov-

03

Feb-0

4M

ay-

04

Aug

-04

Nov

-04

Feb-0

5M

ay-

05A

ug-0

5N

ov-

05

Feb-

06

May-

06A

ug-

06N

ov-

06

Feb-

07

May-

07

Aug-

07

Nov

-07

Feb-0

8M

ay-

08

Aug

-08

Nov

-08

Feb-0

9M

ay-

09A

ug-0

9N

ov-

09

Feb-

10

Confident Worried *Net Balance

Table 1: Long Term Trends in Business ConfidenceTable 1: Long Term Trends in Business Confidence

SOURCE: Sensis® Business Index

Sweeney Research – February 2010

*Net balance defined as the difference between the percentage

who are confident and the percentage who are worried

Page 110 of 116

The table below compares the confidence levels across the main business sectors.

As illustrated, confidence levels are highest in the cultural, recreation and personal services and

health and community services sectors, but are substantially lower in transport/storage sectors.

Confidence levels also vary by location, in February 2010, those in the Territories were the most confident,

while those in Victoria and NSW least positive about their future.

Table 2: Confidence by Business Sector – February 2010Table 2: Confidence by Business Sector – February 2010

49%15%64%Total

23%26%49%Transport/Storage

50%20%70%Retail Trade

50%15%65%Manufacturing

51%10%61%Wholesale Trade

51%14%65%Building/Construction

54%12%66%Finance and Insurance

55%13%68%Accommodation, Cafes and Restaurants

63%9%72%Communication Property & Business Services

70%9%79%Health and Community Services

74%7%81%Cultural, Recreational and Personal

*Net

BalanceWorriedConfident

49%15%64%Total

23%26%49%Transport/Storage

50%20%70%Retail Trade

50%15%65%Manufacturing

51%10%61%Wholesale Trade

51%14%65%Building/Construction

54%12%66%Finance and Insurance

55%13%68%Accommodation, Cafes and Restaurants

63%9%72%Communication Property & Business Services

70%9%79%Health and Community Services

74%7%81%Cultural, Recreational and Personal

*Net






Table 3: Confidence by State and Territory – February 2010Table 3: Confidence by State and Territory – February 2010

58%7%75%Australian Capital Territory

66%11%77%Northern Territory

52%14%66%Tasmania

50%15%65%Western Australia

52%15%66%South Australia

52%16%68%Queensland

46%15%61%Victoria

49%15%64%New South Wales

49%15%64%National

*Net


58%7%75%Australian Capital Territory

66%11%77%Northern Territory

52%14%66%Tasmania

50%15%65%Western Australia

52%15%66%South Australia

52%16%68%Queensland

46%15%61%Victoria

49%15%64%New South Wales

49%15%64%National

*Net






Page 111 of 116

Perceptions of the Economy

In addition to their own business confidence, SME proprietors are asked in the Sensis survey to comment

on their current perceptions of the economy (growth, slow down, standing still) and their expectations for

the next twelve months (better, worse, the same).

In the February 2009 Sensis survey respondents were more likely to believe that the economy was in a

growth phase rather than in slow down, and there was solid expectation that the Australian economy will

improve over the next twelve months.

As for business confidence, the long term trends on perceptions of the economy show a major resurgence

since late 2008 and early 2009.

Slow

down

13%

Standing

still

50%

Growth

37%

Same

35%

Worse

17%

Better

48%

Table 4: The Economy – February 2010Table 4: The Economy – February 2010



The economy now The economy a year from now

-80%

-60%

-40%

-20%

%

20%

40%

60%

80%

Feb-

03

May

-03

Aug-

03

Nov-

03

Feb-

04

May

-04

Aug-

04

Nov-

04

Feb-

05

May

-05

Aug-

05

Nov-

05

Feb-

06

May

-06

Aug-

06

Nov-

06

Feb-

07

May

-07

Aug-

07

Nov-

07

Feb-

08

May

-08

Aug-

08

Nov-

08

Feb-

09

May

-09

Aug-

09

Nov-

09

Feb-

10

The Economy Now The Economy a Year from Now

Table 5: Perceptions of the Economy

Long term trends in * net balance

Table 5: Perceptions of the Economy

Long term trends in * net balance



*Net balance defined as the difference between the percentage who

have a positive outlook and the percentage who have a negative

outlook

Page 112 of 116

Experience and Expectation on Key Indicators

Despite the resurgence in overall confidence measured in the Sensis survey, SME proprietors are by no

means experiencing the same level of success as they were in the past.

This is clearly evidenced by long term trends in the value of sales. Respondents are asked to report on

their experience in the last three months and their expectations for the three months to come.

As, illustrated, whilst the net balance for the last quarter experience is well above the low of late 2008/

early 2009, it remains in negative territory (32% experienced an increase and 32% a decrease).

Table 6: Value of Sales

Trends in *net balance

Table 6: Value of Sales






outlook

-30%

-20%

-10%

%

10%

20%

30%

40%

50%

Oct

-02

Jan-0

3A

pr-

03Ju

l-03

Oct

-03

Jan-0

4A

pr-

04Ju

l-04

Oct

-04

Jan-0

5A

pr-

05Ju

l-05

Oct

-05

Jan-0

6A

pr-

06Ju

l-06

Oct

-06

Jan-0

7A

pr-

07Ju

l-07

Oct

-07

Jan-0

8A

pr-

08Ju

l-08

Oct

-08

Jan-0

9A

pr-

09Ju

l-09

Oct

-09

Jan-1

0A

pr-

10

Experience Expectations

Experience and Expectations for the Three Months Ending:-

Page 113 of 116

Similarly, profitability levels have not yet returned to 2007 levels.

In terms of employment there was a sharp decrease in February in the proportion who reported an

increase in staff numbers and a lift in the proportion reporting a decrease. As a result, the net balance for

change in employment fell to one of the lowest figures on record.

Nevertheless, there are some signs that employment will trend upwards over the coming months.

Over the next 12 months (from February 2010) a sizeable 21% expect to see an increase in the size of

their workforce, and only 6% are forecasting shrinkage.

Table 7: Profitability


Table 7: Profitability






outlook

-30%

-20%

-10%

%

10%

20%

30%

40%

50%

Oct

-02

Jan-0

3A

pr-

03Ju

l-03

Oct

-03

Jan-0

4A

pr-

04Ju

l-04

Oct

-04

Jan-0

5A

pr-

05Ju

l-05

Oct

-05

Jan-0

6A

pr-

06Ju

l-06

Oct

-06

Jan-0

7A

pr-

07Ju

l-07

Oct

-07

Jan-0

8A

pr-

08Ju

l-08

Oct

-08

Jan-0

9A

pr-

09Ju

l-09

Oct

-09

Jan-1

0A

pr-

10



Table 8: Size of Workforce


Table 8: Size of Workforce






outlook

-10%

-5%

%

5%

10%

15%

20%

Oct

-02

Jan-0

3A

pr-

03Ju

l-03

Oct

-03

Jan-0

4A

pr-

04Ju

l-04

Oct

-04

Jan-0

5A

pr-

05Ju

l-05

Oct

-05

Jan-0

6A

pr-

06Ju

l-06

Oct

-06

Jan-0

7A

pr-

07Ju

l-07

Oct

-07

Jan-0

8A

pr-

08Ju

l-08

Oct

-08

Jan-0

9A

pr-

09Ju

l-09

Oct

-09

Jan-1

0A

pr-

10



Page 114 of 116

Concerns

Finally, we look at responses to the open-ended question in the February 2010 Sensis survey.

“As far as your business is concerned, what problems, if any, are you facing at the moment?”

As illustrated, lack of work is the primary concern being nominated by 17% of businesses. Cash flow, the

economic climate and finding or keeping quality staff, also emerge as key concerns.

Trends in the proportion citing lack of work/sales as a problem, shows that concern about this issue

peaked in November 2008 before declining. Nevertheless, the proportion of proprietors concerned about

lack of sales remains high relative to the early and mid 1990‟s.

Table 9: Prime Concerns – February 2010Table 9: Prime Concerns – February 2010

13%

9%

9%

6%

5%

4%

3%

3%

2%

2%

2%

17%Lack of work/sales

Cash flow

Economic climate

Finding/keeping staff

Paperwork/bureaucracy

Competition

Costs/overheads

Finance

Environment/local disasters

Tax

Employment costs

Time pressures No concerns = 35%

Q As far as your business is concerned, what problems, if any, are

you facing at the moment?SOURCE: Sensis® Business Index


Table 10: Prime Concerns

Long term trends for „lack of work or sales‟


Long term trends for „lack of work or sales‟

%

5%

10%

15%

20%

25%

Feb-

03

May-

03A

ug-0

3N

ov-0

3Feb-

04

May-

04A

ug-0

4N

ov-0

4Feb-

05

May-

05A

ug-0

5N

ov-0

5Feb-

06

May-

06A

ug-0

6N

ov-0

6Feb-

07

May-

07A

ug-0

7N

ov-0

7Feb-

08

May-

08A

ug-0

8N

ov-0

8Feb-

09

May-

09A

ug-0

9N

ov-0

9Feb-

10



Page 115 of 116

By contrast, we note that worries about finding or keeping staff declined during the GFC period but is now

re-emerging as a concern for SMEs.

Returning to Table 9, we note that only a small proportion (2%) spontaneously nominated tax as an issue

of concern. However, the issue of paperwork/bureaucracy was more of a worry, being nominated by

6%.

This may suggest that it is not so much the cost of tax which can be burden, but the complexity

of compliance.

In summary, an analysis of the Sensis ® Business Index findings suggests that the SME sector in Australia

has weathered the storm of the GFC and that confidence levels are lifting. Nevertheless, there is still some

way to go before we reach the buoyancy of the mid 90‟s.


Long term trends for „finding/keeping staff‟


Long term trends for „finding/keeping staff‟

%

2%

4%

6%

8%

10%

12%

14%

16%

18%

Nov

-04

Feb-

05

May-

05A

ug-0

5N

ov-0

5Feb-

06

May-

06A

ug-0

6N

ov-0

6Feb-

07

May-

07A

ug-0

7N

ov-0

7Feb-

08

May-

08A

ug-0

8N

ov-0

8Feb-

09

May-

09A

ug-0

9N

ov-0

9Feb-

10



Page 116 of 116

APPENDIX 2: The Questionnaire

Page 1 of 13

Understanding the SME Market Segment Research

Australian Taxation Office SCH Approval No. 01980-02

Study No. 19099

Client Tax Office

Version SCH Version 10 FINAL – 10th February 2010

Research Consultant Aliza Sebel

QUOTAS SME Segment Target Sample

$2 to 10 million turnover 400




GEOGRAPHIC QUOTAS State Target Sample

NSW 330

VIC 260

QLD 190

WA 120

SA 60

TAS 20

NT 10

ACT 10

INTRODUCTION

UPON CALL BEING ANSWERED IF NECESSARY SAY: Could I check that I have called [DROP IN BUSINESS NAME].

Yes Continue 1 No Thank & Terminate 2

Hello, my name is (INTERVIEWER) from Sweeney Research. Could I please speak to the person within this business who is best able to comment on taxation matters?

UPON CONTACT WITH RESPONDENT. Hello, my name is (INTERVIEWER) from Sweeney Research. Could I just confirm that you are the person best able to comment on the businesses’ taxation matters?

IF YES: CONTINUE; IF NO: Ask who would that be?

Page 2 of 13

UPON CONTACT: REINTRODUCE AS NECESSARY.

We are conducting a survey of Australian businesses on behalf of the Australian Taxation Office. Your participation in the survey is important because it will help the Tax office provide better support and assistance to businesses to meet their tax obligations. The survey is about attitudes and opinions towards the Tax Office and does not require disclosure of any details of financial or tax affairs whatsoever. Even if the businesses’ taxation matters are handled by an external accountant, tax agent or bookkeeper we are still very interested in your opinions. This survey has been approved by the Australian Government Statistical Clearing House. The Approval Number is 01980-2. You could verify this approval number by phoning the Statistical Clearing House on 02 6252 5285.

Your participation in the survey is voluntary. If you choose to participate, your answers will be treated in the strictest of confidence and no individual responses will be provided to the Tax Office at any time.

Depending on your answers the survey will take between 10 and 15 minutes. Would you be willing to participate in the survey?

IF YES, CONTINUE.

IF YES BUT NOT NOW, ARRANGE CALL BACK.

IF NO, THANK AND TERMINATE.

IF RESPONDENT WISHES TO SPEAK TO SWEENEY RESEARCH SUPERVISOR: Please contact my supervisor on this toll free number 1800357739 if you would like further information about the study.

IF QUERIED AS TO WHY THE TAX OFFICE IS SURVEYING BUSINESSES: Your participation in this survey is important because it will help the Tax Office to ensure that adequate information, assistance and support is being provided to businesses to meet their tax obligations.

IF QUERIED AS TO HOW SWEENEY RESEARCH GOT THE CONTACT DETAILS: The Tax Office supplied Sweeney Research with your contact details for the purpose of conducting this specific survey on their behalf. Therefore I am bound by the same secrecy and privacy laws as a tax officer. This means I cannot disclose or use your name and contact details for any other purpose than this research. Your business was selected randomly.

IF QUERIED ABOUT BONA FIDES OF RESEARCH: If you would like to verify the legitimacy of this research study, please contact the TAX Office on 13 28 69 asking for Liz Andrews on extension 52459.

AUTO RECORD FROM DATA BASE: Location: ANZSIC Classification: Client Type: Client Sub-type: Sub-segment (Quota based S1 to S4)

Page 3 of 13

SECTION 1: BUSINESS CHARACTERISTICS

Q1 What is your MAIN role in this business?

DO NOT READ OUT.

Chairman 01 President 02 Owner/proprietor/director 03 Chief Executive Officer 04 Managing Director 05 General Manager 06 Business Manager 07 Chief Financial Officer 08 Financial Controller/Director of Finance 09 Financial Manager 10 Accountant 11 Bookkeeper 12 Company Secretary 13 Administrative officer 14 Other Please specify 15 (Don’t know/refused) 99

Q2 How many years has this business been operating in Australia with the current business owners?

DO NOT READ OUT.

Less than 1 year 01 1 – 2 years 02 2 – 3 years 03 3 – 5 years 04 5 – 9 years 05 10 or more years 06 (Don’t know/refused) 99

Q3 Is this business owned by another business?

Yes 01 No 02 (Don’t know/refused) 99

Q4a Does this business own any other businesses?

Yes 01 No 02 (Don’t know/refused) 99

ASK Q4b IF Q1 NOT CODES 11 OR 12 Q4b Does this business employ an

internal Accountant or Bookkeeper? Yes 01 No 02 (Don’t know/refused) 99


READ OUT.

A substantial amount 1 A moderate amount 2 A small amount 3 Not at all Skip to Q5 4

Page 4 of 13

Q4d Which, if any, of the following external tax professionals does this business use to manage some or all business tax obligations?

READ OUT.

Tax agent 1 Accountant/chartered accountant 2 Bookkeeper 3 Salary package service provider 4 Other tax professional Please specify 5

Q4e How satisfied are you with the advice you received from your external tax professionals? Are you… READ OUT

Extremely satisfied 1 Very satisfied 2 Fairly satisfied 3 Not too satisfied 4 Not at all satisfied 5 (Can’t say/don’t know) 6

Q5 Including full-time and part-time staff but not contractors and casuals, how many people does this business employ in Australia?

DO NOT READ OUT.

No other employees (just self/sole trader) 1 2 employees 2 3-4 employees 3 5-9 employees 4 10-19 employees 5 20-99 employees 6 100 or more employees 7 No paid employees 8 Don’t know/not sure 9

SECTION 2: ATTITUDES TO THE TAX OFFICE AND TAXATION

Q6 I’d like to read out some statements about the Tax Office and taxation. Please indicate whether you strongly agree, agree, disagree or strongly disagree with the following… RANDOMISE ORDER.

Strongly Agree Agree Disagree

Strongly Disagree

(Don’t know/

Refused)

a. The Tax Office provides me with the information I need to manage the tax affairs of this business 1 2 3 4 5

b. The advice given by the Tax Office provides me with the certainty I need to manage the tax affairs of this business

1 2 3 4 5

c. The Tax Office does a good job in educating and informing the business community about taxation matters

1 2 3 4 5

d. The Tax Office treats this business fairly and reasonably 1 2 3 4 5

SECTION 3: FRINGE BENEFITS TAX (FBT)

Q7a Does this business usually pay Fringe Benefits Tax, also called FBT?

Yes 1 No Skip to section 4 2 Not sure Skip to section 4 3

Page 5 of 13

Q7b Overall, how well do you understand this business’s FBT obligations?

READ OUT.

Very well 1 Well 2 Not very well 3 Not at all well 4


Yes 1 No 2 Not sure 3 Not applicable/don’t need information 4

Q7d Would you like more FBT information from the Tax Office?

Yes 1 No 2 Not sure 3


READ OUT. MULTIPLE OK.

Tax Office call centre 1 Tax Office website 2 Tax Office business portal, which businesses register to use 3 Tax professional such as an accountant or tax agent 4 Industry or professional body to which you belong 5 Other Please specify 6 No information on FBT required 7

ASK IF CODES 1, 2 OR 3 IN Q7e; OTHERS GO TO Q8a

Q7f Is there anything specifically the Tax Office could do (could have done) to better assist you or this business with FBT compliance?

SECTION 4: CAPITAL GAINS TAX

Q8a Did this business report a capital gain or loss (also known as CGT), in the 2008/09 financial year?


Q8b Do you expect to file a CGT return in the next 2 years?


IF NO OR UNSURE TO Q8a AND Q8b SKIP TO SECTION 5.

Q8c Overall, how well do you understand this business’s CGT obligations?

READ OUT.


Page 6 of 13

Q8d Can you easily get the CGT information that you need from the Tax Office?


Q8e Would you like more CGT information from the Tax Office?




Tax Office call centre 1 Tax Office website 2 Tax Office business portal, which businesses register to use 3 Tax professional such as an accountant or tax agent 4 Industry or professional body to which you belong 5 Other Please specify 6 No information on CGT required 7

Q8g Have you used the Tax Office electronic publication called, “Guide to Capital Gains Tax” available on the Tax Office website?

Yes Continue 1 No Go to Q8j 2 Not sure Go toQ8j 3


READ OUT.

Extremely useful 1 Very useful 2 Fairly useful 3 Not too useful 4 Not at all useful 5 (Can’t say/don’t know) 6

Q8i How would you rate the publication in terms of ease of navigating through the site to access the information you require? Is it…

READ OUT.

Extremely easy to navigate 1 Very easy to navigate 2 Fairly easy to navigate 3 Not too easy to navigate 4 Not at all easy to navigate 5 (Can’t say/don’t know) 6

ASK Q8j IF CODES 1, 2 OR 3 IN Q8f; OTHERS GO TO SECTION 5

Q8j Is there anything specifically the Tax Office could do (could have done) to better assist you or this business with CGT compliance?

SECTION 5: INCOME TAX

Q9a Is this business a part of the Pay as you go system, known as PAYG?

Yes 1 No Go to section 6 2 Unsure Go to section 6 3

Page 7 of 13

Q9b Overall how well do you understand this business’s PAYG obligations?

READ OUT.


Q9c Can you easily get the income tax information that you need from the Tax Office?


Q9d Would you like more income tax information from the Tax Office?




Tax Office call centre 1 Tax Office website 2 Tax Office business portal, which businesses register to use 3 Tax professional such as an accountant or tax agent 4 Industry or professional body to which you belong 5 Other Please specify 6 No information on Income Tax required 7

IF CODES 1, 2 OR 3 IN Q9e; OTHERS GO TO SECTION 6

Q9f Is there anything specifically the Tax Office could do (could have done) to better assist you or this business with Income Tax compliance?

SECTION 6: PRODUCTS, SERVICES AND TOOLS


READ OUT.

The Tax Office business portal, which businesses register to use 1

Tax Office website 2

Tax Office legal database 3 Online version of calculators/other tools 4 SME Communicator 5 SME Tax Forum 6 Tax Office business tax enquiries line – 13 28 66 7 Tax Office online subscription feature 8 None of these Ask Q10b then go to Section 7 9

Q10b Are there any other Tax Office products, services or tools that you have used in the last 12 months?

Yes – RECORD VERBATIM 1 No 2 Can’t recall/don’t know 3

Page 8 of 13

Q10c FOR EACH PRODUCT/SERVICE/TOOL USED AT Q10a How would you rate the usefulness of [insert name of product/service] in helping this business meet its tax

obligations? Would you say [Insert Product Service] is… READ OUT. RANDOMISE ORDER.

Extremely useful

Very useful

Fairly useful

Not too useful

Not at all useful

Can’t say/don’t

know

a. The Tax Office business portal 1 2 3 4 5 6

b. Tax Office website 1 2 3 4 5 6

c. Tax Office legal database 1 2 3 4 5 6

d. Online version of calculators/other tools 1 2 3 4 5 6

e. SME Communicator 1 2 3 4 5 6

f. SME Tax Forum 1 2 3 4 5 6

g. Tax Office business tax enquiries line – 13 28 66 1 2 3 4 5 6

h. Tax Office online subscription feature 1 2 3 4 5 6

SECTION 7: CHANNEL

Q11 For this business, what is the most preferred method of obtaining tax information from the Tax Office?

READ OUT. SINGLE RESPONSE ONLY.

Tax Office Website 1 Tax Office business portal, which businesses register to use 2 Email from/to the Tax Office 3 By calling the Tax Office 13 28 66 business enquiry line 4 Paper mail from/to the Tax Office 5 If queried: Hardcopy publication By visiting the Tax Office 6 Through Tax Office seminars provided by the Tax Office 7 (No preference) 8

SECTION 8: PROFESSIONAL, BUSINESS OR INDUSTRY ASSOCIATION MEMBERSHIP

Q12a Are you personally a member of any professional association/s?

Yes Continue 1 No Go to Q12c 2 Don’t know/not sure Go to Q12c 3

Q12b Which association/s are you personally a member of?

DO NOT READ OUT.

Certified Practising Accountant (CPA) 01 Institute of Chartered Accountants in Australia (ICAA) 02 National Institute of Accountants 03 Law Institute – Various State Bodies 04 Other Please specify 05 Don’t know/not sure 99

Q12c Is this business a member of any industry or business association/s?

Yes Continue 1 No Go to Section 9 2 Don’t know/not sure Go to Section 9 3

Page 9 of 13

Q12d Which associations is this business a member of?

DO NOT READ OUT.

Australian Institute Of Company Directors (AICD) 01 Australian Institute Of Management (AIM) 02 Australian Business Limited 03 Australian Industry Group (AIG) 04 Automobile Chambers Of Commerce – Various State Bodies 05 Business Council Of Australia (BCA) 06 Chamber Of Commerce And Industry (NFI) 07 Chamber Of Commerce (NFI) 08 Employers Chambers Of Commerce And Industry – Various State Bodies 09 Family Business Australia (FBA) 10 HIA - Housing Industry Association 11 Master Builders Association 12 Motor Trade Association Of Australia 13 Motor Traders Associations – Various State Bodies 14 Small Business Association Of Australia 15 Other Please specify 16 Don’t know/not sure 99

SECTION 9: GLOBAL FINANCIAL CRISIS

Q13a Which of the following statements best describes the impact of the global financial crisis on this business…? READ OUT

It has had a positive impact 1 It has had minimal or no impact 2 It has had a negative impact but this business has fully recovered or is recovering 3 It has had a negative impact and this business has not shown any signs of recovery 4 (Can’t say/refused) 5

ASK Q13b IF Q13a CODES 3 OR 4 Q13b What strategies, if any, have you adopted to overcome the negative impacts of the global financial crisis?

SECTION 10: PHOENIX

Q14a Have you heard of Tax Office activities targeting Phoenix businesses, that is businesses that go bankrupt leaving unpaid creditors then re-emerging under a different name the next day?

Yes Continue 1 No Go to Section 11 2 Not sure Go to Section 11 3

Q14b Do you believe the Tax Office should be taking action to curb these activities?


Page 10 of 13

Q14c To what extent do you strongly agree, agree, disagree or strongly disagree that the Tax Office is doing an effective job at curbing these activities?

Strongly agree 1 Agree 2 Disagree 3 Strongly disagree 4 (Can’t say) 5

SECTION 11: CORPORATE GOVERNANCE

There is a lot of focus these days on good corporate governance, that is the responsibility of business proprietors and directors to fully meet their legal and ethical obligations.

Q15a Are you personally involved in aspects of this business requiring you to have some responsibility for corporate governance?

Yes Continue 1 No Skip to Section 12 2 Not sure Skip to Section 12 3

Q15 To what extent do you strongly agree, agree, disagree or strongly disagree with the following statements about corporate governance?

RANDOMISE ORDER.

Strongly

agree Agree Disagree Strongly disagree

(Don’t know/

Refused)

b. I believe I have a good knowledge of my corporate governance responsibilities 1 2 3 4 5

c. It is part of my corporate governance responsibility to ensure I comply with all aspects of the tax regulations 1 2 3 4 5

d. Corporate governance does not offer any benefits to this business, it is just another administrative burden 1 2 3 4 5

SECTION 12: COMPLIANCE

Q16 Do you strongly agree, agree, disagree or strongly disagree with the following statements about tax compliance?

Strongly

agree Agree Disagree Strongly disagree

(Don’t know/

Refused)

a. The complexity of the tax laws makes it difficult for businesses to comply with their tax obligations 1 2 3 4 5

b. It is the responsibility of owners and directors to ensure their business is fully compliant with tax obligations

1 2 3 4 5

SECTION 13: INTERNATIONAL

Q17a Does this business deal internationally through exporting, importing, running businesses off-shore, having off-shore investments and the like?


Page 11 of 13

Q17b What type of information from the Tax Office, if any, would be of assistance to this business in addressing the tax aspects of international dealings?

DO NOT READ OUT.

Payments to foreign residents 1 Off-shore borrowings/lending 2 Transfer pricing 3 Currency trading/hedging 4 GST implications 5 Other Please specify 6 None 7

SECTION 14: BUSINESS EXITS





SECTION 15: TRUSTS

Q19a Does this business operate as a trust? Yes Continue 1 No Go to Section 16 2 Not sure Go to Section 16 3



SECTION 16: CAPITAL MANAGEMENT

This section is about using business funds for private purposes such as payments, loans and advances to share holders. This may not apply to this business’s arrangements. Q20a Payments, loans and advances made

to shareholders are normally treated as taxable income. Before today were you aware of this?


Q20b What steps if any can be taken to avoid a tax implication if drawing on company funds for payments, loans or advances?

DO NOT READ OUT.

Loan agreements 1 (Other specify 2) Don’t know 3 None Go to Section 17 4

Page 12 of 13


Accountant/Tax Agent 1 Lawyer 2 Professional Body 3 Other specify 4 Nowhere would do it in-house 5 Don’t know 6

SECTION 17: CONCLUSION

Q21 Apart from reducing the level of tax, what is the one thing the Tax Office could do to assist you or this business with tax compliance?

Q22 As a follow up to this study, would you be willing to participate in further research?

Yes 1 No 2

Q23a Would you be interested in joining the Tax Office’s online SME Tax Forum? This forum allows businesses to engage with the tax office to improve the level of service provided to businesses and reduce compliance costs.

DO NOT READ OUT.

Yes - interested 1 Maybe interested, would like more information 2 No, not interested 3 (Don’t know/refused) 4

Q23b Would you like the Tax Office to contact you to provide you with more details about the SME Tax Forum?

Yes 1 No 2

IF CODES 1 OR 2 IN Q23a ASK Q23b

End of interview. Thank you. That is the end of the interview. Once again my name is (… … …) from Sweeney Research. Should you need to contact us again please call us on 1800 35 77 39.

The study has been conducted on behalf of the Australian Taxation Office.

As part of quality control procedures, someone from our project team may wish to re-contact you to ask a couple of questions, validating the information we have collected.

As part of quality control procedures, someone from our project team may re-contact you to validate our data collection processes.

As a market research company, we comply with the requirements of the Privacy Act. The information you have provided will be used only for market research purposes.

Would you like me to give you any more details about how we comply?

Page 13 of 13

If yes then say: As I mentioned we may contact you to verify some of the information you gave us. Once we have completed our validation and processing of information, please be assured that your name and contact details will be removed from your responses to this survey. After that time, we will no longer be able to identify the responses provided by you. However for the period of time that your name and contact details remain with your survey responses, which will be approximately (one month) you can contact us to request access to your information and/or ask us to delete some or all of your information.

Once again, thank you for your time. My name is ….. and I’m calling from Sweeney Research. If you have any queries, you can call the Market Research Society’s Survey Line on 1300 364 830 (for the cost of a local call).

If no: Thank and close.

Date of interview:

Respondent’s name:

Phone number:

Address (if applicable):

“I certify that this is a true, accurate and complete interview, conducted in accordance with the IQCA standards and the MRSA Code of Professional Behaviour (ICC/ESOMAR). I will not disclose to any other person the content of this questionnaire or any other information relating to this project.”

Signed: Interviewer:

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