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People are feeling the stress of the rising cost of living. The average worker and small-business leaders (SBLs) alike are positioning themselves for the upcoming financial year.
According to research from Officeworks, spending habits and plans for the year are affecting how people approach the end of financial year.
What the average person is doing
Officeworks revealed that 90 per cent of Australians are planning to complete their tax return. This figure has climbed in recent years, as just 83 per cent said the same last year and 75 per cent in 2021.
Twenty-nine per cent said they were saving money by doing their tax return themselves. The younger generations were more likely to do this, with 41 per cent of Gen Z, 35 per cent of Millennials, 31 per cent of Gen X, and just 16 per cent of Baby Boomers.
People are feeling the crunch as we approach the end of financial year, as 47 per cent said that the cost of living has shifted their spending habits. To assist in purchasing, 34 per cent are putting more research into products, and 31 per cent compare the prices at different retailers.
While many may be putting an increased focus on claiming their tax, plenty are still confused. In fact, 46 per cent of respondents said they aren’t sure what they’re able to claim on their return. Furthermore, there are those who forget to claim office-related purchases.
Officeworks general manager of merchandise Jim Berndelis commented: “It’s no surprise that Australians are looking for smarter ways to spend and save this EOFY, and at Officeworks, we understand the pressure associated with the rising cost of living and the related impacts on small business.”
“Whether it’s upgrading home office furniture, investing in new tech, or stocking up on stationery essentials, we know our customers will be looking to make the most of EOFY, their tax returns, and their workspace.”
On the other hand, there are those claims that are a little riskier. Thirteen per cent believe takeaway coffee should be tax-deductable. With working from home becoming so popular, 24 per cent believe toilet paper should be able to be deducted too.
What small business leaders are doing
Small-business leaders (SBLs) face similar financial stresses, prompting similar techniques for maximising profit.
Sixteen per cent of SBLs feel more confident than usual about their tax return. However, plenty of others are still confused. Fourteen per cent aren’t sure about what they’re able to claim, and 62 per cent find the process confusing.
This is causing worry, as 23 per cent said their business struggled this financial year and aren’t looking forward to EOFY. This is up from 17 per cent last year.
“Tax time can be a source of stress, anxiety and overwhelm for many. But if we let our fear cause us to disengage from the detail of the process, we are potentially leaving money on the table,” said the founder of Women with Cents, Natasha Janssens.
“While we’re trying to find ways to deal with rising cost of living pressures, it is important to remember that managing your tax return effectively can help to support your cash flow. The less tax you pay, the more money you have to reinvest in your business or put towards household bills.”
Leaders see the benefits the return brings, as 61 per cent agree that a healthy tax return is important for growth.
Cost of living is, again, a major concern, with 72 per cent of SBLs worried about the effect it is having on business growth and stability. Just 17 per cent of SBLs are confident about how their business is tracking, down from 20 per cent last year.
There is some hope, though, as 59 per cent believe they’re in a position to perform well in the coming financial year.
SBLs have varied priorities for the upcoming year; however, the most common goal was growth, with 46 per cent saying that’s their top focus. Coming in second, at 30 per cent, was getting organised for EOFY.
It seems profits are more of a priority than other functions, as just 20 per cent cited staff happiness as their main focus, and 19 per cent said improved cyber security was theirs.
Jack Campbell
Jack is the editor at HR Leader.
