More than half of Canadian small businesses cite income and sales taxes as key concerns in meeting compliance rules and regulations

By admin • January 11th, 2010

<p>More than half of Canada&#039;s small businesses point to taxes as their major concern when it comes to complying with government rules and regulations, according to the latest results to be released from a &#039;financial literacy&#039; survey conducted by Angus Reid Public Opinion for Sage North America. A total of 54&#037; of businesses surveyed cited either income taxes or sales taxes as their most crucial compliance concern, with more than a third (38&#037;) pointing to income taxes and another 16&#037; saying sales taxes.</p> <p>&quot;Canada&#039;s small businesses view taxes as a critical concern when it comes to compliance. In 2010 we will see changes in Ontario and British Columbia, with Ontario&#039;s Retail Sales Tax (RST) and B.C.&#039;s Provincial Sales Tax (PST) being replaced by a harmonized, value-added sales tax (HST).&quot; said Jamie Sutherland, vice president and general manager, Simply Accounting. &quot;These changes will affect a large number of small businesses and we want Canadian business owners to know that Simply Accounting is designed to help keep them compliant with new regulations.&quot;</p> <p>The latest round of results are contained in a recent Sage North America survey that examines the financial state of small businesses by focusing on their &#039;financial literacy,&#039; as defined by: how businesses manage compliance with government requirements; their comfort level with financial management; how finances are managed; and where financial information is obtained. Other concerns include cash flow, with more than half (51&#037;) of small business owners identifying this as one of the two most important aspects of financial management that are crucial to businesses success.</p> <p>Initial results from the 17-question survey of 503 small business owners, announced in October 2009 by Sage, revealed that nearly a quarter of small business owners in Canada could not identify the key costs that they need to manage for success. As well, two thirds of small businesses said they were negatively affected during 2009 by Canada&#039;s economic downturn.</p> <p>&quot;While the survey revealed a reasonable level of financial literacy among small businesses today, it&#039;s obvious that there is room for improvement both in the financial knowledge base that exists among small businesses today in Canada and how that knowledge is being implemented to help businesses succeed and grow,&quot; said Hamish Marshall, research director, public affairs, for Angus Reid Public Opinion.</p> <p>Other highlights of the Angus Reid-Sage small business survey include:</p> <ul> <li>Small business owners keep up with regulatory changes in various ways. The most popular sources of information on changes are: professional services such as an accountant or lawyer (59&#037;); government web sites or phone line (38&#037;); other people in the same profession (21&#037;). Other information sources cited regarding regulatory changes include: industry association (18&#037;), accounting software (17&#037;), small business publications (16&#037;), small business web sites (15&#037;) and seminars (9&#037;).</li> <li>Larger companies are more likely to obtain information on regulatory changes from professional services (80&#037;) and industry associations (31&#037;).</li> <li>More than two thirds (69&#037;) of small business owners wait until they file their tax return to see what effect tax code changes had on their taxes, while only 31&#037; promptly include announced tax code changes into their financial plans for the coming year. More financially literate people or those who have a high comfort level with financial management, are more likely (34&#037;) to promptly include tax code changes in their plans, as are those with accounting software (40&#037;).</li> <li>Small business owners rely on diverse sources for advice on managing finances. The most common resource is an accountant or consultant, relied on by 65&#037; of businesses, followed by the Internet (38&#037;), contacts in the same industry (32&#037;), government information (29&#037;), friends and family (24&#037;), books (21&#037;), business or industry association (15&#037;), mentors or former employers (14&#037;), employees (4&#037;) and business education services (4&#037;).</li> <li>The most commonly outsourced service today is accounting, as cited by 39&#037; of businesses, while payroll is done in-house by 48&#037; of business owners, and invoicing and billing are performed by 78&#037; of businesses themselves.</li> </ul> <p>The survey was conducted Oct. 2-7, 2009 and the majority of respondents (58&#037;) were the sole employee of the business being surveyed. The survey results have a margin of error of plus or minus 4.4&#037;, 19 times out of 20.</p> <p><strong>Harmonized Sales Tax (HST)</strong><br/> For more information on the Harmonized sales tax, please visit <a href=”http://www.simplyaccounting.com/tax” target=”_blank”>http://www.simplyaccounting.com/tax</a> or <a href=”http://fr.simplyaccounting.com/tax” target=”_blank”>http://fr.simplyaccounting.com/tax</a>.</p>

 

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