ATO Small Business Engagement · ATO – Small Business Engagement 8 On an emotional level, tax...

TNS Level 1, 181 Miller Street North Sydney NSW 2060 t +61 2 9563 4200 e [email protected] TNS is a trade mark of Taylor Nelson Sofres Plc

ATO – Small Business Engagement

Report – Final

Prepared For:

Australian Taxation Office

TNS Social Research Consultants:

Robyn Rutley

Sophie Elliott

Raelle Tatarynowicz

TNS Ref. 263103634/5

March, 2016


1

Please note that the data contained in this report has been prepared for the specific purpose of

addressing the items contained in the project contract between TNS Australia and the

Australian Taxation Office (ATO). It may not be suitable for other applications. The use of

this data for any other purpose should be discussed with the lead author. TNS accepts no

responsibility for unauthorised use of this data by a third party.


2

Contents

1. Executive summary ....................................................................................... 4

2. Background ................................................................................................. 13

3. Methodology ................................................................................................ 16

4. General attitudes and perceptions of small business ......................................... 25

5. Current perception and behaviour of small businesses with regards to tax

requirements ................................................................................................... 33

6. Engagement with tax service providers ........................................................... 38

7. Channel preferences ..................................................................................... 46

8. Drivers of engagement with the ATO ............................................................... 51

9. Appendix A - Questionnaire ........................................................................... 60

10. Appendix B – Start-up discussion guide ......................................................... 85

11. Appendix C – ‘Running’ discussion guide ........................................................ 94

12. Appendix D – ‘Change’ discussion guide ...................................................... 103


3

List of Figures

Page No.

Figure E1 – Sources of information and advice when commencing business .............. 5

Figure E2 – Sources of information for business tax requirements ........................... 6

Figure E3 - Reasons for engaging with the ATO and tax professionals ...................... 7

Figure E4 - Satisfaction with the ATO’s ability to provide advice, support and information ...................................................................................................... 8

Figure E5- Agreement with key drivers of engagement .......................................... 9

Figure 1: Business operation, Experience in managing business administration, Business lifestage, total (%) .............................................................................. 26

Figure 2: Perception of current vs future business performance, total (%) ............... 27

Figure 3: Top two business priorities when commencing business, by time in operation (%) ................................................................................................................ 28

Figure 4: Main business priorities when commencing business, total (%) ................ 29

Figure 5: Sources of advice or information on business issues when commencing

business, total (%) ........................................................................................... 31

Figure 6: Commenced thinking about business tax requirements, total (%) ............ 32

Figure 7: Confidence in managing business tax requirements (%) .......................... 34

Figure 8: Top 5 concerns when managing business tax requirements, total (%) ....... 35

Figure 9: Sought information/advice about business tax requirements, total (%) ..... 36

Figure 10: Seeking business advice or information, total (%) ................................ 37

Figure 11: Main business tax activities that tax professionals are used for, total (%) 39

Figure 12: Reasons for interacting with the ATO, total (%) .................................... 40

Figure 13: Times when business tax advice or information is most needed from the ATO, total (%) ................................................................................................. 41

Figure 14: Benefits of using a tax professional, total (%) ...................................... 42

Figure 15: Benefits of interacting with the ATO last 12 months, total (%) ............... 44

Figure 16: Comparison of attributes, ATO vs Tax professionals, total (%) ............... 45

Figure 17: Service channel continuum ................................................................ 46

Figure 18: Preferred channel for interacting with the ATO (%) ............................... 50

Figure 19: Overall satisfaction with the ATO (%) .................................................. 51

Figure 20: Overall satisfaction with the ATO, by subgroup (%) .............................. 52

Figure 21: Explanation of driver analysis ............................................................. 53

Figure 22: Driver analysis ................................................................................. 55

Figure 23: Agreement with the statement ‘The ATO gives me the right information to meet my needs’ (%) ......................................................................................... 56

Figure 24: Agreement with the statement ‘The ATO listens to the needs of small businesses’ (%) ............................................................................................... 57

Figure 25: Agreement with the statement ‘Dealing with the ATO is simple’ (%) ....... 58

Figure 26: Agreement with the statement ‘the ATO are on my side’ (%) ................. 59


4

1. Executive summary

Small businesses in Australia play a significant role in the economic health of the nation, with

more than nine in ten businesses classified as small. They are estimated to provide close to half

of all national employment.

As part of the Australian Taxation Office’s (ATO’s) reinvention program, and the push towards a

more client-centric approach, the ATO has identified the need to better understand and in turn

facilitate their relationship with small businesses, their interactions, approachability and

aptitude to help them fulfil their tax and superannuation obligations.

TNS Social Research was commissioned by the ATO to conduct research to inform the

development of the Small Business Engagement strategy. The primary objective of the research

is to provide high-level advice to inform a client-centred strategy for facilitating small business’s

engagement and interaction with the ATO. More specifically, the research aims to identify:

The drivers and triggers for engaging with the ATO

How businesses engage with the ATO

The drivers and barriers to using each of the service channels

The drivers and barriers to take-up of the ATO’s digital services

Identify actions to undertake, from a strategy development perspective

The research comprised both qualitative and quantitative research with small businesses. The

qualitative stage consisted of eight (8) focus groups, and five (5) individual in-depth interviews

with small businesses across Australia, conducted in October 2015. The quantitative research

consisted of a total of n=800 telephone interviews with small businesses from across Australia,

conducted in December 2015.

A summary of key findings appears below.


5

1. Small businesses have a low tendency to seek information when starting their

business

Motivations for starting a small business fall into two clear categories – following their heart

(doing something they are passionate about) or working for themselves (being their own boss).

Regardless of their motivation, small businesses that are new to business are more naïve in

relation to business and tax obligations. Moreover, they tend to be disinclined to engage in tax

planning in light of other priorities related to starting up their business. They have a number of

concerns in relation to their business when starting out, in particular record keeping, end of

year statements, managing cash flows, and understanding their tax and workplace obligations.

This presents a distinct opportunity for the ATO to create early positive engagement with small

business.

Despite the fact that over three in four small businesses (79%) think about business tax

requirements before or as soon as they start operating, over one quarter (28%) claim they

didn’t seek advice or information from anyone. A further 41% seek advice and information only

from informal sources (previous experience, friends, family, google, online forums, other

businesses, business partner or mentor). The primary source of information and advice when

starting in business is an accountant (25%), while slightly over one in ten (13%) seek

information from business or industry associations, highlighting the opportunity of working with

these third parties to encourage early positive engagement.

Figure E1 – Sources of information and advice when commencing business

QB4. Again, thinking about when you first started your current business, where did you go for advice or information on

these issues? PROBE: Anywhere else?

BASE: All respondents, n=800

Chart may not add to 100% due to multiple response

Note: full results relating to this question are presented on page 31


6

2. Tax professionals play an important role in supporting small business and are

clearly the preferred source of information and advice

Almost all small businesses approach an accountant as the ‘first port of call’ for a tax-related

issue. As demonstrated in Figure E2, below, of the three quarters (74%) of small businesses

who have ever sought information or advice about their business tax requirements, 80% claim

that their accountant is their first source of information and advice.

Figure E2 – Sources of information for business tax requirements

QB8. Have you ever sought advice or looked for information about business tax requirements?


QB9a. When you were looking for this business tax advice or information, where did you go first?

QB9b. Anywhere else?

Filter: Those who have sought information (QB8), n=588


Note: full results relating to this question are presented on pages 36 and 37

The ATO is not top of mind for business tax advice, with nearly half the small business

population indicating they would not approach the ATO for advice ‘any time at all’ (47%).

Further, three in ten small businesses claim to have had no interaction at all with the ATO in the

past twelve months. Accordingly, the level of engagement with tax professionals is greater than

the level of engagement with the ATO on almost any tax-related issue, as demonstrated in

Figure E3. The primary reasons for engaging with the ATO tend to be transactional in nature, in

particular BAS (26%), tax payments (14%), and GST management (9%).


7

Figure E3 - Reasons for engaging with the ATO and tax professionals

QC1. Thinking now specifically about these tax professionals, what is the main business tax activity you used them for

within the last year? PROBE: Anything else?


QD1. Within the last year, what are the reasons you would generally interact with the ATO for? PROBE: Anything else?

BASE: All respondent, n=800

Charts may not add to 100% due to multiple response


A preference for seeking advice from tax professionals is driven by very positive perceptions of

their approachability, capability, accessibility, knowledge, trustworthiness, and reliability – as

well as their familiarity with the ATO. Qualitative findings suggested that the appeal of tax

professionals is shaped by both preconceived notions and experience. For instance, tax

professionals are perceived to offer more personal and specific information and advice because

they are attuned to the specifics of an individual’s business and the broader context of their

business (e.g. history, future plans, personal/family issues), allowing them to offer a more

holistic perspective and tailored advice. In addition to this, there is a strong belief that tax

professionals have the ability to ‘tell them what they didn’t know they didn’t know’. This is

particularly pertinent for new businesses who are often overwhelmed and seeking a ‘one stop

shop’ for information and advice, and accountants are seen as being able to provide this

service.

Another key differentiator is the role of the tax professional as an ‘interpreter’. Where the ATO

is perceived to be fairly rigid and functional in the way they deliver information, tax

professionals, on the other hand, are perceived to interpret tax information and provide advice

specifically for the benefit of the business.

In addition to these drivers, the use of a tax professional is considered to be a time-saving

strategy for the small business, as well as convenient. This positively impacts the administrative

burden felt by small businesses, reducing their load.


8

On an emotional level, tax professionals were thought to be representing the best interests of

small businesses and to be motivated to save them money. They were seen to provide

reassurance and peace of mind – both in terms of compliance and optimising benefits for the

business.

In strong contrast, the relationship between small businesses and the ATO is seen as

predominantly a transactional one, where there is limited personal interest or investment on

behalf of the ATO. The biggest emotional barrier to small businesses actively engaging with the

ATO is the ATO’s role as a regulator, leading to a belief that they are not necessarily

representing the best financial interests of small business.

3. The four key drivers of engagement with the ATO are:

The ATO gives me the right information to meet my needs

The ATO listens to the needs of small business

Dealing with the ATO is simple

The ATO are on my side

More than one in three small businesses are satisfied with the ATO’s ability to provide advice,

support and information, with a further over one third ‘neutral’ in their views (see Figure E4,

below). Interestingly, the level of engagement satisfaction with the ATO increases according to

the recency of contact – i.e. perceptions were far more positive among those who had been in

contact with the ATO in the past twelve months. This is an important finding and suggests that

the ATO’s current service provides a more positive experience for small business than it has in

the past. It also suggests, however, that many businesses may have formed an entrenched

impression of the ATO, based on interactions from some time ago. This was confirmed in the

qualitative research, which suggested that perceptions of the ATO were shaped as much by the

‘popular view’, preconceptions and assumptions or previous experiences, as they were by

recent interaction.

Figure E4 - Satisfaction with the ATO’s ability to provide advice, support and

information

QG1. Using a scale of 1 to 5 where 1 is very dissatisfied and 5 is very satisfied, overall, how satisfied are you with the

ATO’s ability to provide advice, support and information for your business?


Chart does not show ‘don’t know’/ ‘Not applicable’

Chart may not add to 100% due to rounding



9

The research identified four key drivers of engagement with the ATO, which impact significantly

on businesses’ satisfaction with the ATO, and should be the focus of any engagement strategy

the ATO develops for small business. Maximising agreement with each of these attributes will in

turn maximise overall engagement satisfaction with the ATO. These drivers are:





Agreement with each of these drivers varies considerably, with highest agreement evident for

the ATO providing the right information to meet my needs (52% agree), and the lowest

agreement with the ATO listening to the needs of small business (23% agree) – see Figure E5,

below. While the agreement rates are low and demonstrate a lack of engagement with the ATO,

nearly one quarter of small businesses are neutral in their rating for each of the key drivers,

indicating considerable potential to improve engagement by shifting neutral to positive – a

much easier undertaking than trying to shift entrenched negative attitudes.

As for overall engagement with the ATO, recency of contact with the ATO is related to each of

the key drivers. In particular, agreement is higher for each key driver when small businesses

have had contact with the ATO in the past twelve months.

Figure E5- Agreement with key drivers of engagement

QF2. Using a scale of 1 to 5 where 1 is strongly disagree and 5 is strongly agree, how much do you agree or disagree with

the following statements….

‘The ATO gives me the right information to meet my needs’

‘The ATO listens to the needs of small business’ ‘Dealing with the ATO is simple’

‘The ATO are on my side’

BASE: All respondents

Chart does not show ‘don’t know’/ ‘Not applicable’. Chart may not add to 100% due to rounding

Note: full results relating to this question are presented on pages 56, 57, 58 and 59


10

The ATO gives me the right information

Small businesses often have a very clear need for tailored advice and assistance in relation to

their tax and superannuation requirements. This occurs in relation to transactional assistance

(e.g. assistance with completing BAS, how to fill out a form) and more complex tax or

superannuation advice.

Depending on the urgency or complexity of the request, businesses will either initially look to

the ATO website or immediately defer to their tax professional. ATO resources were often

regarded as a good first source for straightforward requirements or transactional requests, but

not the preferred source for tailored tax or superannuation advice where the clear preference is

for small businesses to speak with a tax professional. Even where small businesses do

approach the ATO, with the expectation of tailored tax and superannuation advice, they are

often unsatisfied and end up consulting a tax professional.

Dissatisfaction with tailored (more complex) advice from the ATO can occur for two key

reasons:

1. Unrealistic expectations of small business in relation to the ATO’s ability to provide

tailored advice.

2. The complexity of the query may require the call centre staff to refer the query to their

supervisor and/or to a specialised team. Often in this situation small businesses are

required to repeat (sometimes multiple times) their situation and context, which causes

frustration and is often considered a waste of time for the small business.


Despite a significant program of consulting with small business across Australia, only one

quarter of small businesses agree that the ATO listens to the needs of their community. This

reflects a perception that the ATO service is fairly perfunctory and generic, offering little

opportunity for discussion or consultation.


Just over one quarter of small businesses believe dealing with the ATO is simple, with extensive

criticism around the accessibility of ATO services and information. A number of channels

contributed to this perception, including the website, telephone service and printed

communications.

It is vital to understand the need for specific channels - when they are sought and for what

reason - when considering the type of content each touch point should offer and the level of

service available at each. For example, a preference for human contact is not necessarily a

reflection of their degree of ‘digital savviness’, but a general preference for speaking to

someone who can understand their issues in the context of their own lives and situations.

Small businesses also become extremely frustrated if staff refer them back to the website for

the required information when they have started their quest for assistance there. This has a

detrimental impact on the perception of engagement with the ATO, again reinforcing the

preference for engaging with a tax professional.


11


Less than half of small businesses believe that the ATO are on their side. The research revealed

very mixed attitudes towards the ATO. While many recognise the ATO has a role to assist small

business, there is also a very strong association between the ATO and enforcement and

penalties, resulting in questioning around whose ‘side’ the ATO really were on. By contrast, tax

professionals were clearly seen to represent the best financial interests of small business,

providing an individual service that is focused on minimising tax and maximising income to the

business.

Some of the challenges mentioned above, and throughout this report, are already known to the

ATO. This research points to the importance of acknowledging the challenges and building on

the opportunities to improve the ATO’s engagement with, and services to, small businesses.

It will be important to monitor the relative impact of the four key engagement drivers, as the

small business engagement strategy is implemented, with a goal to achieve the service industry

standard of 70% (or more) agreement that small businesses are satisfied with their

engagement with the ATO (see Section 8 for more details).


12

1.1 Recommendations

Based on this research, there are a number of recommendations for consideration in the

development of a small business engagement strategy, as outlined below.

1. Small businesses have a low tendency to seek information when starting their business

It is important to recognise that government is not the first choice for information when setting up a

business, suggesting the need to leverage opportunities with third parties (e.g. accountants, industry

associations) and the broader community, and pointing to the need for greater investment in

community engagement and outreach activities.

Further research is required to explore why small businesses think about tax requirements when

starting their business without acting on this, the ways different motivations for starting a business

impact this, and further exploration of the specific concerns of small business when starting their

business and how the ATO can help address these concerns.

2. Tax professionals play an important role in supporting small business and are clearly the

preferred source of information and advice

Engagement strategies with small business need to consider and incorporate the important role that

tax professionals play, in particular when planning the design of ATO products and services and in the

development of ATO communications with small business.

3. The four key drivers of engagement with the ATO are giving the right information to meet

needs, listening to needs, simple dealings and being on the side of small business

While acknowledging the challenges highlighted in the findings of this small business engagement

research, it recommended that the ATO develop integrated strategies to improve performance against

each of the four key drivers of engagement to lift small business satisfaction to a rating of 70% or

more.

To improve engagement and services to small businesses, the ATO could consider the following:

Right information/easy dealings

Manage small business expectations of the kind of tailored advice that the ATO can realistically provide

to them.

Provide hands-on instruction and advice, education and training through seminars, conferences and

site visits – with a focus on practical demonstrations.

Website - simplify the design and navigability of the website; dedicate sections for identified business

needs, e.g. by industry or lifestage, ensure FAQs and search functions are easy to use.

Written communications (including website content) - in plain English and avoid the use of jargon.

Call centres - reduce the waiting time and use a ticketing system, where possible; manage

expectations when escalating calls and train frontline staff to effectively and compassionately deal with

their frustrations (including not referring them to the website when they’ve already exhausted this

channel).

Online services - review closure of payment processes online to encourage a sense of reassurance that

they do not need to speak to an operator, thereby reducing wait times on the telephone; raise

awareness of, and provide assistance to use, self-service channels; provide the ability to interact online

via loading of stimulus (screenshots, photos from smartphones etc).

Consider assigning a single point of contact (or ‘case manager’) to individual businesses, who can

respond to queries and concerns specific to that business.

Listening to needs/on their side

Demonstrate and communicate that the ATO takes small business priorities and concerns seriously.

It is essential that the ATO present an image to the business community that conveys values of

support, reassurance and trustworthiness; backed up by a service that is attentive, patient,

responsive, friendly and approachable.


13

2. Background

The vital contribution of Australian small businesses

Australian small businesses are an essential component of, and contributor to, the national

economy. With over 90% of businesses in Australia classified as small1, these businesses are

not only diverse, covering all industries and operating across metropolitan, regional and rural

communities, they are also the dominant type of business in all sectors.

Small businesses contribute a range of goods and services to local and international consumers,

as well as feed into medium and larger businesses. While over 60% are ‘non-employing’, small

businesses are estimated to provide close to half of all national employment. In addition to this,

small businesses also play a vital role in our communities, contributing to local social life and

supporting local causes2.

Challenges facing small businesses

Australian small businesses face multiple challenges to their growth and longevity. These

include global trends such as increasing competition, wider economic uncertainty and the rise of

online; as well as those closer to home, including cautious consumer sentiment, access to

labour and skills, regulatory burden, increasing costs of operating, and securing finance. In

addition to these external challenges, small businesses are also required to contend with a

multitude of internal challenges that are integral to their operation, compliance and ultimately

success.

Among the biggest internal challenges faced are those to do with managing finances, time and

administrative burden. Small businesses are largely recognised as being time-poor, and time-

poor business owners identify administrative tasks as their most pressing issue and one that

they subsequently struggle to address. While small businesses are recognised for their ability to

remain resilient, adaptive and innovative despite the challenges they face, these challenges play

a vital role in shaping how small businesses operate, their ability to be engaged and how this

process should play out. What’s more, while it is recognised that small businesses often face

similar challenges, every business is unique.

Liaising and communicating with small business

As part of the ATO’s reinvention program, and the push towards a more client-centric approach,

the ATO has identified the need to better understand and in turn facilitate their relationship with

small businesses, their interactions, approachability and aptitude to help them fulfil their tax

and superannuation obligations. There is also the added interest to move taxpayers towards

digital engagements.

1 The definition of small business varies widely, however, this figure reflects that used by the ATO.

2 ABS 8165.0 counts of Australian Business including exits and entries June 10-14; Scoping study of small business tax

compliance costs – a report to the Treasurer, Board of Taxation, December 2007


14

2.1 The role of the research

This research will inform the development of the ATO’s strategic approach to facilitating

interaction and engagement with the small business community. The research will provide a

clearer understanding of user perceptions of and preferences for engaging with the ATO,

thereby providing a clear path forward for a client-centric strategy, which aims to meet the

needs of small businesses and is likely to encompass both communications and service delivery.

Additionally, the research will establish benchmarks to support the ongoing evaluation of small

business engagement.


15

2.2 Research objectives

The following research objectives and information objectives were identified:

2

To ensure understanding of the research objectives, a deconstruction of the overarching question to a logical

framework has been undertaken, forming a set of questions that will be answered through the research.

To provide high level advice to inform a client-centred strategy for facilitating small business’

engagement and interaction with the ATO.

What are the trigger points for

engagement across the business life

cycle?

What is the level of awareness and

understanding of the range of the

ATO’s access points/ service

channels?

What underlies the decision to engage

with the ATO?What are business’

needs and expectations?

What is the level of usage of each

channel?

When and how are the different access

points/ service channels used?

How does this vary for different needs/

activities?

How satisfied are businesses with

their experience of different channels?

What are the perceived costs and

benefits of using each of the channels?

What is the role of habit and norms in influencing channel

usage?

What strategy should be adopted

to facilitate business interaction

and engagement with the ATO?

What are the drivers and triggers to

engaging with the ATO?

What are the drivers and

barriers to using each of the

service channels?

What are the drivers and

barriers to take-up of the ATO’s digital services?

How do businesses

engage with the ATO? What are

levels of engagement with different channels and how does this

vary by need?

What actions should be undertaken from

a strategy development perspective?

- page 2 -

What is the role of intermediaries in

influencing channel use?

How can the ATO build and maintain

trust with small businesses as they progress through the business life-

cycle?

What is the relative profile of each

channel?

What situational and contextual

influences are at play?

To what extent do businesses feel

confident/ capable about engaging with different

channels? What might deter businesses from

engaging with the ATO?

What are the gaps in understanding

and usage and what is driving that?

How digitally engaged is the small business

community generally?

How does prior/ attempted access

drive perceptions of digital services and attitudes to use?

To what extent does the provision

of the ATO’s services online

appear legitimate to the business

customer base?

What are the perceived costs and

benefits of using digital channels compared with other channels?

To what extent does self-efficacy

drive/ inhibit digital service usage and how significant is this as a barrier to

usage?

What/ who influences

businesses around engagement with

the ATO?

How well is the need to engage with the ATO

understood? How does this vary for

different requirements/

activities?

What are the drivers and barriers

for first time vs ongoing use?

How does this vary for small businesses of different sizes/ in different industries

and in different locations?





What are business’ experiences with the various digital channels? How and

when are they used?

What segments exist with different needs, what is the

nature of those differences and how

can they best be accommodated?

What is the optimal combination of engagement

activities, marketing and communication,

education, information and

service enhancement in meeting strategy

objectives?

How does the use of intermediaries

influence business’ engagement with

the ATO? When and why would

businesses choose to use an agent vs liaising with the ATO directly?

What does engagement with the ATO mean to

businesses?

How can the ATO challenge barriers

and reinforce drivers to using digital channels?

How can the ATO ensure that they are meeting the needs of small

businesses on both emotional and rational levels?


16

3. Methodology

3.1 Overview of research approach

In order to effectively explore the issues outlined in the research objectives, a multi-modal

research approach was undertaken. This comprised of a qualitative ‘developmental’ component,

and a quantitative component for benchmarking and segmentation purposes. Overall, the

research was structured as follows:

Each of the methodological approaches is described in more detail, below.


17

3.2 Qualitative research

The primary focus of the developmental stage of the research was to ascertain the attitudes and

perceptions of small businesses, with the focus of understanding drivers and barriers to

interacting with the ATO, and using different access points/channels (particularly, digital

services).

Focus group scope and structure 3.2.1

Focus groups were undertaken with owners or financial decision makers of small businesses

operating under the Australian tax system, at different stages of the business life cycle, and

with different levels of digital engagement.

Sessions were 90 minutes in duration and conducted at a focus group facility or similar venue.

Each focus group included 4-6 participants.

Focus groups were structured as follows:

In-depth interviews scope and structure 3.2.2

Individual in-depth interviews were conducted face-to-face and were around 60 minutes in

duration.

In-depth interviews were structured as follows:

Group Location Business status Connected Life

segment Revenue

1 Sydney Start-up Observers <75k

2 Sydney Running Functionals $75k-$2m

3 Brisbane Start-up Functionals <$75k

4 Brisbane Running Connectors $75k-$2m

5 Ballarat Start-up Leaders <75k

6 Ballarat Running Observers $75k-$2m

7 Mandurah Change Functional $75k-$2m

8 Mandurah Running Leaders $75k-$2m

IDI Location Business status Revenue

1 Sydney Change <$2m

2 Sydney Change <$2m

3 Brisbane Running <$2m

4 Ballarat Change <$2m

5 Mandurah Start-up <$2m


18

Definitions used to define businesses, for the focus groups and in-depth interviews, were:

Business life cycle:

Start-ups: New businesses, whose focus is on setting up and establishing their business

Running: Businesses who are established, and focussed on growing further

Change: More mature businesses considering making changes or exiting/winding up.

Business size:

Non-GST: Turnover less than $75,000

Small: Turnover between $75,000 and $2 million

Connected Life segments:

Participants defined their digital aptitude in accordance with the TNS ‘Connected Life’ segments,

using the following statements:

‘Which of these descriptions best fits you?’

I use the Internet for a few things but it’s not my primary source of news or

entertainment. I tend not to use social media all that much, if at all. [FUNCTIONAL]

I use social media on occasion, but the internet is my primary sources of news,

entertainment and information. [OBSERVER]

While I use the internet for a few things, using social media is the main thing I do

online. [CONNECTOR]

I rely on digital and social media constantly throughout the day in all parts of my life.

[LEADERS]

A mix of business sizes (based on employees), industries and entity types (i.e. sole traders,

partnerships, trusts and companies) were recruited within and across groups/interviews.

Location 3.2.3

Focus groups and in-depth interviews were held in metro and regional areas across four states,

to ensure a representation of small businesses across Australia. Specific locations were Sydney,

Brisbane, Ballarat and Mandurah.

Fieldwork dates 3.2.4

All components of the qualitative research, the focus groups and individual in-depth interviews,

were all conducted from the 15 October to the 21 October 2015.


19

Recruitment 3.2.5

Recruitment for both the focus groups and the in-depth interviews was undertaken by McGregor

Tan (for the East Coast participants) and ThinkField (for the West Coast participants).

Incentives 3.2.6

Participants received $150 as an incentive for participating in either the focus groups or the in-

depth interviews.

Discussion guides 3.2.7

The discussion guides for all qualitative sessions were designed by TNS and provided to the ATO

for review, comment and approval prior to their use. These discussion guides were designed to

be used as memory aids for the facilitators in order to ensure key topics were covered;

however, discussion with participants in the qualitative phase was flexible to enable participant-

led issues and themes to be raised and discussed.

Please refer to Appendices B, C and D for the discussion guides


20

3.3 Quantitative research

The quantitative component of this research was primarily to provide reliable baseline

measures, to test and verify hypotheses and validate participant-led themes that emerged in

the qualitative stage, and to provide a platform for undertaking a statistical segmentation. A

Computer Assisted Telephone Interview (CATI) methodology was implemented. This was

deemed to be the most reliable means to reach a representative sample of the ATO customer

base and, as such, adequately allow for an assessment of the attitudes and behaviours of the

target audience.

Research sample 3.3.1

CATI was conducted with n=800 small businesses, with quotas set on location to ensure there

was representation across Australia.

Quotas were defined as follows:

State Sample size

(per state)

Total

NSW, VIC n=150 n=300

QLD, WA, SA n=100 n=300

TAS, NT n=75 n=150

ACT n=50 n=50

TOTAL n=800

A sample size of n=800 delivers a maximum margin of error of +/- 3.5%. This is a highly

rigorous sample size, and will ensure the ability to report a sound evidence base, both at a

‘total sample’ level, as well as by the various customer cohorts and sub-groups of importance.

Interviewing was conducted by Q&A Research and the sample provided by Dunn and

Bradstreet.

Questionnaire 3.3.2

The questionnaire was designed by TNS and provided to the ATO for review, comment and

approval prior to use. Questionnaire content was informed by the participant-led themes that

emerged in the qualitative component of the research.

Please refer to Appendix A for the questionnaire.

The following is an overview of data collected:

Screeners

Current perceptions

o Business performance

o Business priorities at inception

o Information and advice


21

o Business tax requirements

Tax professionals

o Interaction

o Benefits

ATO

o Interaction

o Benefits

Perceptions of ATO and tax professionals

Engagement profile

ATO performance

Channel preference

Digital engagement.

Cognitive tests 3.3.3

n=8 cognitive tests were undertaken to ensure the questionnaire was understood clearly and

consistently across different small businesses. Review and amendments of questionnaire

content and wording was conducted in response to the findings from the cognitive tests.

SCH approval 3.3.4

The questionnaire was reviewed and approved by the Australian Government Statistical Clearing

House (SCH). The approval number is 02475-01.

Survey length 3.3.5

On average, the time taken to complete the survey was 16.2 minutes.

In field dates 3.3.6

The survey was in field from 30 November to 19 December 2015.

All research was conducted in accordance with ISO20252 standards.


22

3.4 Reading notes

Please bear the following in mind when reading this report:

Qualitative and quantitative findings 3.4.1

This report draws on both the qualitative and quantitative components of the research, to

provide both depth of insight and validation of findings. While not all topics were covered in

both components of the research, where possible they have been used in conjunction with each

other to offer breadth of insight.

Subgroups 3.4.2

Throughout the report differences between the following subgroups have been reported on.

Each of these subgroups emerged through analysis as influential differentiators in driving

engagement.

Experience in managing business administration

Length of time current business has been in operation

Turnover for the financial year 2014/2015

Interaction with the ATO

Self-assessed business life stage: Start-up, Running, Change

Significant differences 3.4.3

Significant differences between subgroups have been commented on, where pertinent.

Significant differences, at 95% confidence interval, have been noted in charts, as follows:

Between subgroups:

Significantly higher than other subgroup/s in category

Significantly lower than other subgroup/s in category

Where differences between subgroups have been noted and are not annotated as being

significant, these differences are supported by the qualitative findings and as such are

considered noteworthy.

Charted results 3.4.4

In order to facilitate analysis and comparison of findings across subgroups, all charts and tables

have been presented using percentages (as opposed to number of mentions). In some cases,

data in charts may not add up to 100%. This is a result of rounding, or for some question types,

multiple responses, where allowed.


23

3.5 Sample profile

Total

(n=) (%)

Business location

Sydney 61 8

NSW – other 89 11

Melbourne 67 9

VIC – other 81 10

Brisbane 33 4

QLD – other 67 8

Perth 60 8

WA – other 40 5

Adelaide 67 8

SA – other 33 4

TAS 75 9

NT 75 9

ACT 50 6

Annual turnover

Less than $75,000 154 19

$75,000 - $2 million 648 81

Structure

Sole trader 135 17

Partnership 107 13

Company 445 56

Trust 127 16

Number of employees

0 employees 114 17

1–5 employees 433 65



More than 20 employees 4 1

Registered for GST

Yes 771 96

Industry

Agriculture, Forestry and Fishing 39 5

Mining 14 2

Manufacturing 78 10

Electricity, Gas, Water and Waste Services 12 2

Construction 60 8

Wholesale Trade 18 2

Retail Trade 202 25

Accommodation and Food Services 37 5

Transport, Postal and Warehousing 26 3

Information Media and Telecommunications 21 3

Financial and Insurance Services 38 5

Rental, Hiring and Real Estate Services 21 3

Professional, Scientific and Technical Services 72 9

Administrative and Support Services 6 1

Education and Training 20 3

Health Care and Social Assistance 34 4

Arts and Recreation Services 52 7

Other Services 50 6

Business life stage

My business is in the early stages 30 4

The business is established 486 61

The business is about to go through major changes 111 14

I am considering exiting the business 173 22


24

Discussion of research findings

The remainder of this report discusses the findings of the research and incorporates both

qualitative and quantitative findings.


25

4. General attitudes and perceptions of

small business

4.1 Overview of the current small business landscape

Business profile

An interesting finding of this research is that the self-selected business stage* does not directly

correlate with the length of time the business has been in operation – to some extent it is a

state of mind. Nearly half (46%) of businesses who consider themselves to be in a Start-up

phase have been in business for 3 or more years, with over one quarter (26%) in business for 6

or more years. Conversely, however, the majority of Running and Change businesses have

been in business for 11 or more years (88% and 89% respectively).

While this is somewhat at odds with what may instinctively be expected (i.e. Start-ups would be

“new to business”), it is an important finding of the research as it reflects client experience.

While the qualitative research suggested considerable naivety among Start-ups, in terms of

what is involved in running their own business, many of them have managed business

administration previously, as detailed in Figure 1. This suggests that the reality of starting your

own business is potentially more complicated than expected, leading to an increase in anxiety

and sense of being somewhat overwhelmed by the requirements and commitment involved.

*Business stages they chose from: Reported as:

My business is in the early stages (start-up phase)

Start-ups

The business is established

Running

The business is about to go through major changes (e.g. expanding, downsizing, changing direction)

Change

I am considering exiting the business (e.g. selling, closing, transferring ownership)


26

Figure 1: Business operation, Experience in managing business administration,

Business lifestage, total (%)

SC9. How long has your business been in operation?

SC1. How long have you been involved in managing the business administration of this (or other) businesses?

SC8. Which of the following best represents the stage your business is currently in?



Chart does not show ‘don’t know’/ ‘can’t remember’ or ‘prefer not to say’

Business sentiment

Overall, sentiment around small business performance is relatively mixed, with just under half

(46%) of all small businesses feeling positive about their current performance, one in three

(32%) unsure, and one in five (22%) feeling pessimistic (see Figure 2 – p.26).

Perception of their business’s future performance is equally mixed, with only a slight uplift in

how they feel currently. Overall, one in two (49%) businesses feel positively about their future.

Small businesses that have been in recent contact with the ATO (last 12 months) are more

likely to feel positively about their current business performance (48%), compared to those who

have not had contact with the ATO in the last 12 months (42%). Similarly, when considering

future business performance, those who have been in recent contact with the ATO are

significantly more likely to feel positively (55%), compared to those who haven’t (38%).

Experience in managing business administration also has an impact on perception of current

business performance, with perceived positivity decreasing as experience increases. Similarly,


27

when considering their future business performance, those with less business administration

experience are again more optimistic.

There is also a correlation between a business’s annual turnover and its assessment of business

performance. Understandably, those with a higher turnover are more likely to feel positively,

compared to those with a lower turnover. Only a third (33%) of businesses earning less than

$75,000 feel positive about their current performance, while about four in ten (38%) feel

positively about its future.

The business life stage significantly influences this sentiment with those who consider

themselves to be in the Running phase feeling the most positive (52%), while those who

consider themselves in the Change phase feel the least positive about their current state

(34%). Interestingly, when it comes to future perceptions of business performance, those who

consider themselves in the Start-up phase significantly feel the most optimistic (63%), while

those who consider themselves in the Running and Change phase only predict slight uplift to

their current performance (55% and 38% respectively). On the whole, businesses that consider

themselves to be in the Change phase demonstrate a more pessimistic outlook compared to the

other business life stages, reflective of their current experience.

Figure 2: Perception of current vs future business performance, total (%)

QB1. Using a scale of one to five where 1 is extremely negative and 5 is extremely positive, how positive or negative would

you say you are currently feeling about how your business is performing at the moment?

QB2. And using the same scale of one to five, how are you feeling about the future of your business, in say 12 months

from now?



28

4.2 Commencing a new business

In order to explore the motivations, priorities, and behaviours associated with starting a new

business, respondents were asked to recollect their experience when first starting their current

business. It is worth noting that in the quantitative findings, the overwhelming majority of

respondents (92%) have businesses that have been in operation for more than 5 years, with

over half (56%) having been in operation for 21 or more years.

Motivations for starting a new business

Motivations for starting a small business fall into two clear categories:

1. Following their heart – doing something that they love/are passionate about.

2. Working for themselves – not being at the behest of a large

business/corporation/government department; being their own boss.

While not explored in the quantitative research, the qualitative research suggests that those

who follow their heart may be more naïve when it comes to business, in particular tax related

issues, and, for some, they place a lower priority on managing their finances and tax

obligations. Their focus is clearly on the elements of business that they are interested in and

that fall within their area of expertise. In order to better understand this, further research to

validate these findings is recommended.

When asked what their main business priorities were when first starting in business, one in two

(50%) businesses considered ‘making money’ to be their main priority, while 1 in 5 (20%)

considered it to be ‘getting customers/clients’. Beyond these two, main business priorities when

starting a business become considerably fragmented, demonstrating the diversity of drivers

behind small businesses – see Figure 4, overleaf.

While ‘making money’ and ‘getting customers/clients’ are the top two priorities across all

businesses, regardless of time in operation, more emphasis is put on ‘getting customers/clients’

among newer businesses, compared to businesses that have been in operation longer (see

Figure 3, below). Conversely, the proportion of small businesses that nominate ‘making money’

as their top priority is fewer among those new to operating.

Figure 3: Top two business priorities when commencing business, by time in

operation (%)

% Years in operation

5 or less 6 - 10 11 - 20 21 or more

Making money 37 55 48 52

Getting customers/clients 27 25 22 16

This was echoed by businesses that consider themselves to be in the Start-up phase. ‘Making

money’ and ‘getting customers/clients’ are of equal value to this group, with nearly 2 in 5

(37%) identifying one of these as their main priority. What’s more, Start-ups are significantly

more likely to say ‘getting clients/customers’ compared to businesses who consider themselves

to be in the Running and Change phase.


29

The qualitative research explored areas of concern for their business in general. Here we see

differences by business stage, with Start-ups having a wide range of concerns, in particular

record keeping, end of year statements, managing cash flows, and understanding their tax and

workplace obligations. This presents an opportunity for the ATO to create early positive

engagement with small business by addressing these concerns.

These areas of concern lessen as the business progresses, with Running businesses concerned

about staffing, GST requirements (as compared to more general tax requirements for Start-

ups), and Change businesses are primarily concerned about end of year accounting, and

keeping up to date with legislative requirements/obligations in relation to the workplace and

tax.

Figure 4: Main business priorities when commencing business, total (%)

QB3. What were your main business priorities when you first started this business? PROBE: Anything else?

BASE: All respondents, n=800 Chart may not add to 100% due to multiple response


30

Seeking information and advice on business issues when commencing business

Over one quarter of small businesses (28%) claim they didn’t seek advice or information from

anyone when starting their business (see Figure 5), with a further 41% seeking advice and

information only from informal sources (previous experience, friends, family, google, online

forums, other businesses, business partner, mentor). The primary source of advice and

information when starting in business is an accountant (25%) followed by business and industry

associations (13%). Only 1% of small businesses seek advice or information from the ATO

when starting their business, and only 6% of small businesses seek information or advice from

any government agency.

The higher propensity to seek information or advice from an accountant, as opposed to other

information sources, demonstrates the natural inclination for businesses to use the services of

tax professionals. As outlined earlier, the qualitative research shows this is largely a response to

being overwhelmed when first commencing in business, and the desire to reduce the associated

burden and minimise any risk. Accountants offer trust, accountability and expertise at what can

be an overwhelming time in the business life stage. In this way, the role of the accountant

becomes embedded in the business’s operation from early on, becoming a top of mind source

for information or advice throughout the life of the business.

Findings suggest that newer businesses were more likely to seek information or advice when

starting out, compared to businesses that have been operating longer. Only 15% of businesses

that have been in operation for 5 years or less indicate they didn’t seek information or advice

when commencing their business. This is compared to 23% of small business who have been in

operation for 6-10 years, 26% who have been operating for 11–20 years (statistically

significant compared to 5 years or less) and 31% who have been operating for 21+ years

(statistically significant, compared to 5 years or less). Interestingly, regardless of length of time

the business has been operating, there is a consistent reliance on ‘previous

experience/knowledge’ when starting a business.


31

Figure 5: Sources of advice or information on business issues when commencing

business, total (%)

QB4. Again, thinking about when you first started your current business, where did you go for advice or information on

these issues? PROBE: Anywhere else?



Small businesses that have been operating for 5 years or less are more likely to have sought

advice or information from an accountant when commencing their business (37%, compared to

25% of businesses who have been operating for 6–10 years and 24% who have been in

operation for 11+ years). This mirrors the qualitative findings that demonstrate that new

business operators are often overwhelmed when starting out and are seeking a ‘one stop shop’

for information and advice. The role of the accountant is such that it is perceived to offer a

breadth of knowledge, tailored to the individual’s needs. This is, therefore, an obvious choice for

those with less knowledge about setting up a business.

Recent interaction with the ATO has little impact on the likelihood to engage with an accountant

for information and advice when commencing business. In fact, those who have had recent

contact with the ATO are slightly more likely to have sought information or advice from an

accountant when commencing their business (26% vs 23%). This is likely due to the perceived

role of the accountant as a partner, as opposed to the ATO as a regulator.


32

Triggers for thinking about business tax requirements

The lack of actively seeking information and advice (as detailed on the previous pages) is

somewhat at odds with the four in five businesses (79%) who claim they commenced thinking

about business tax requirements either before they started the business or as soon as they

started operating the business, as demonstrated in Figure 6. This does, however, reinforce the

qualitative research, which suggested that when people are starting their business they are

often overwhelmed, sometimes to the point of not doing anything (despite thinking about it).

They have low self-efficacy, in relation to business tax at this stage of their business, and have

a certain disinclination to actively engage in tax planning or management. Their priority is

developing the business and staying afloat.

Figure 6: Commenced thinking about business tax requirements, total (%)

QB5. When did you first start thinking about your business tax requirements? Would it be…




33

5. Current perception and behaviour of

small businesses with regards to tax requirements

Understanding how small businesses approach managing their business tax

requirements

When it comes to small businesses managing their business tax requirements, notable

differences emerge between each of the business life stages. The qualitative research showed

that experience and need directly influence a business’s knowledge, aptitude and confidence in

dealing with their business tax requirements. Businesses in the Start-up phase are particularly

influenced by this, as their experience, or lack thereof, with managing business tax

requirements fragments this group further.

Within the Start-up phase, less experienced business owners tend to have low knowledge and

engagement when it comes to business tax requirements. Tax is not salient and there is some

disinclination to engage with the issue in light of other competing concerns associated with

establishing a business. Within this group, knowledge and concern emerge fairly organically, as

the need arises or circumstances change. As early Start-ups become more established, they

become more attuned to the tax burden (time and cost) and engagement increases. Salience of

the issue grows, lack of knowledge is viewed as a shortcoming and concerns are magnified due

to inexperience.

Businesses in the Running phase demonstrate a greater level of engagement generally,

reflecting their experience of the costs and benefits of effective tax management. When it

comes to managing business tax requirements, self-efficacy is higher among this group, with

established approaches and systems in place. That being said, there is a general consensus that

as the business grows, tax complexities also grow and this challenges their confidence when it

comes to managing business tax requirements.

Businesses in the Change phase tend to have a high level of experience and are generally well

established in their processes when it comes to business tax requirements, systems are

embedded and being challenged by day-to-day tax issues is largely reduced. However, among

this group there is also a heightened potential to be resentful of tax burden, particularly if

struggling financially, and as such they are more likely to be questioning, looking to change or

streamlining their approach.


34

Confidence in managing business tax requirements

As outlined in Figure 7, three in four (73%) small businesses indicate they feel confident when

it comes to managing their business tax requirements, of which four in ten (42%) indicate they

feel extremely confident.

Positively, overall, less than 1 in 10 (9%) indicate they do not feel confident.

Not surprisingly, greater experience with managing business administration equates to greater

self-assessed confidence when it comes to managing business tax requirements. Among those

who have two or less years’ experience with managing business administration, two in three

(66%) feel confident. This is compared to 69% of small business operators who have 3–5 years’

experience, 73% who have 6–20 years’ experience, and 75% who have 21+ years’ experience.

Those who have contacted the ATO in the last 12 months are slightly more likely to have a

higher level of confidence. While three in four (75%) small businesses who contacted the ATO

in the last 12 months say they feel confident, seven in ten (70%) of those who did not make

contact say the same. What’s more, among those who did not contact the ATO, one in seven

(15%) indicate they lack confidence (compared to 6% among those who did).

Figure 7: Confidence in managing business tax requirements (%)

QB6. Using a scale of 1 to 5, where 1 is not at all confident and 5 is very confident, how confident are you in managing

your business tax requirements?




35

Concerns when managing business tax requirements

Nearly two thirds (61%) of businesses indicate they have no concerns or issues in relation to

managing their business tax requirements (see Figure 8).

However, among those who do acknowledge concerns/issues, ‘Knowing/keeping up to date on

tax regulations/laws’, ‘Not knowing if I'm doing the right thing’ and ‘Managing cash flow’ are the

areas of most concern for small businesses.

Not surprisingly, those who have greater experience managing business administration are less

likely to feel concerned about managing their business tax requirements. Among those with low

experience (less than 2 years), there is a heightened level of concern; 55% of those with less

than 2 years’ experience say they have ‘no concerns’ compared to 64% of those who have been

managing business administration for 21+ years. Among those with lower experience, the key

areas of increased concern are ‘Knowing/keeping up to date on tax regulations/laws’ (26%),

and ‘Not knowing if I'm doing the right thing’ (17%).

Among those with greater experience, ‘Managing cash flow’ and ‘Time issues/volume of work

required’ are the areas of heightened concern.

Figure 8: Top 5 concerns when managing business tax requirements, total (%)

QB7. What concerns or issues, if any, do you have in relation to managing your business tax requirements? PROBE:

Anything else?




36

Sought information/advice about business tax requirements

Positively, the clear majority of small businesses indicate that they actively engage with the

topic of business tax requirements. Overall three in four (74%) claim to have ever sought

information or advice about business tax requirements (see Figure 9).

Generally, propensity to engage with the topic of business tax requirements, by seeking out

information or advice, decreases as experience in managing business tax requirements

increases. This is similarly the case as time in operation increases.

Figure 9: Sought information/advice about business tax requirements, total (%)



As with commencing a business, across all business life stages, accountants are the primary

source of business tax information for small businesses. Four in five (80%) small businesses

that sought information on business tax requirements did so initially from an accountant (see

Figure 10 – p.36).

For just over one in ten small businesses (12%), the ATO was their initial source for information

or advice, of which the overwhelming majority went to the ATO website (10%).

The majority of small business operators rely on just one source of business tax information or

advice, with just over three in five (63%) small businesses not looking beyond this initial

source. Of these businesses who only use one information source, 89% are seeking advice or

information from an accountant.


37

Figure 10: Seeking business advice or information, total (%)


QB9b. Anywhere else?

Filter: Those who have sought information (QB8), n=588



38

6. Engagement with tax service providers

6.1 Reasons for using tax professionals and the ATO

From the qualitative research, it was clear that self-efficacy and experience are the key

determinants of help-seeking behaviour. In conjunction with this, capabilities and confidence

therefore strongly influence inclination to do things independently or to seek help from external

sources, as well as what help is sought and from whom.

The vast majority of small businesses (95%) have used a tax professional in the last year,

including tax agents, BAS agents, accountants and bookkeepers. The two key reasons small

businesses consult with them are for assistance with their annual tax return (68%), and for

BAS-related support and advice (39%) – see Figure 11 (on p.38). There are a plethora of other

reasons for working with a tax professional including for general advice and information, GST

management, income and deductions/depreciations and record keeping systems and

maintenance.

The qualitative findings reinforce this, indicating the degree to which tax professionals are

embedded in small business’s operations. Tax professionals are used for a wider range of tax

and business matters and are the preferred source of information or advice when tax issues are

more personal, specific or complex, or when the risk of getting it wrong is high or could have

serious consequences. In this way, tax professionals are seen to offer an all-encompassing

service that traverses the breadth of small business needs, regardless of size.


39

Figure 11: Main business tax activities that tax professionals are used for, total (%)

QC1. Thinking now specifically about these tax professionals, what is the main business tax activity you used them for

within the last year? PROBE: Anything else?




40

When it comes to small businesses engaging with the ATO, there are two key triggers that

underpin this relationship – transactional assistance and tax and/or superannuation advice.

Transactional assistance is defined by the ATO and is generally a requirement of business

operation (e.g. completion of tax returns, BAS lodgements, specific tax payments or

arrangements). Seven in ten (70%) small businesses have had an interaction with the ATO in

the last year, primarily for BAS-related queries (26%) or to make tax payments (14%). rather

than using them as a source of information and advice.

The need for tax and/or superannuation advice, especially where there is an area of confusion

or concern, also prompts interaction with the ATO. Only 7% of small businesses contacted the

ATO for general advice or information, 4% for advice on regulations, legal changes and

updates, and 2% for information or advice regarding income and deductions – see Figure 12.

Figure 12: Reasons for interacting with the ATO, total (%)

QD1. Within the last year, what are the reasons you would generally interact with the ATO for? PROBE: Anything else?




41

In line with this predominantly transactional relationship with the ATO, small businesses don’t

have a set time when they most need advice or information; rather it is clearly on an as-

required basis. As outlined in Figure 13, nearly half of small businesses (47%) don’t think there

is any time they need advice or information from the ATO, preferring to deal with their tax

professional.

Figure 13: Times when business tax advice or information is most needed from the

ATO, total (%)

QD3. Are there specific times in the life of your business where you most need business tax advice or information from the

ATO?




42

6.2 Perceived benefits of tax professionals and the ATO

The primary benefit of working with a tax professional is their expertise and knowledge of tax,

with nearly three quarters (72%) of small businesses who work with tax professionals of this

opinion, and a further one in five (19%) of the belief that tax professionals are familiar with the

ATO and the way they work (see Figure 14). Around one in four work with tax professionals as

a saving to themselves, either in time (13%), or just in general (14%).

Figure 14: Benefits of using a tax professional, total (%)

QC2. What benefits are there to using a tax professional? (Prompt if necessary: For example tax agents, BAS agents,

accountants and bookkeepers.) PROBE: Anything else?

BASE: Filtered to respondents who have used a tax professional (QC1), n=755



43

The qualitative research reinforces this, and goes further to suggest that tax is seen as a

‘mythical beast’ for which small businesses do not have the understanding or inclination to stay

on top of. As such, the use of tax professionals becomes very embedded and habitual in their

operations. This habit is often shaped by early negative experiences of dealing with the ATO,

reinforcing the importance of getting off to the right start with small businesses in the ‘new to

business’ phase. Further to this, tax professionals are seen to be genuinely interested in the

success of the businesses they assist, providing the appropriate information and support to

allow this. They are seen to have a more complete understanding of the small business, and the

context in which it is operating, including knowledge of its history, future plans/goals, influence

and importance of family and other personal commitments.

Despite clear pathways for small businesses to engage with the ATO, there are a number of

barriers that act to inhibit this. To a great extent, the barriers to engaging with the ATO are the

flipside of the drivers of engaging with tax professionals.

Perhaps the biggest emotional barrier to small businesses actively engaging with the ATO is the

ATO’s role as a regulator and therefore being seen as not necessarily representing their (the

taxpayer’s) best financial interests. The ATO is considered to be more ‘self-interested’ and

functions to extract as much tax as possible. As such, they are not perceived to offer the same

level of personal support or individual investment. As previously outlined, this is in stark

contrast to the positioning of the tax professional as being personally interested in their

business and seeking the best possible financial outcome for them. For this reason, the ATO is

seen to not necessarily be supportive of small businesses and the challenges they face and,

while the ATO is understood to be a natural source of general information/advice, there is sense

of reluctance about approaching them.

Many small businesses believe that accessing information or advice from the ATO can be

difficult, relying on the ability of the individual staff member to interpret and understand the

information offered. There is a general consensus that there are inconsistencies in both service

and advice offered by the ATO, which is not only off-putting but undermines the ability to trust,

something that is key to small businesses, especially when starting out.

Along with this, there are a number of avoidance heuristics at play. Desire, or even need, to

maintain optimism around starting/running a business influences behaviour. In this way,

avoidance can be used to minimise/mitigate the feelings of fear, worry or concern that are

associated. Further to this, when it comes to engaging with the ATO, some small businesses,

indicate there is also a sense of wariness to approaching them for fear that the interaction could

lead to an inadvertent assessment of fault.

Unfortunately, when it comes to dealing with the ATO, nearly half of the small businesses who

have interacted with them in the past year (45%) believe there are no benefits to them for

doing so (see Figure 15 – p.43). The predominant benefits of working with the ATO are they are

accurate (15%) and informed and knowledgeable (14%).


44

Figure 15: Benefits of interacting with the ATO last 12 months, total (%)

QD2. What benefits are there to interacting with the ATO? PROBE: Anything else?

BASE: Filtered on respondents who have interacted with the ATO (QD1), n=553



45

6.3 Brand associations of tax professionals and the ATO

As demonstrated in Figure 16, across the board tax professionals have significantly stronger

associations with all of the ATO’s desired brand attributes. Over nine in ten small businesses

associate tax professionals with being approachable, capable, knowledgeable and accessible.

The strongest associations with the ATO (from about three in five small businesses) are

capable, trusted, reliable and knowledgeable.

The largest differentials between tax professionals and the ATO are being accessible (91%

association for tax professionals, versus 52% for the ATO), and being approachable (93% and

56%), suggesting that these two attributes in particular need to be focused on for improved

engagement with the ATO.

The smallest differential is cost effectiveness (61% association for tax professionals and 42%

for the ATO). Given the relatively low association of cost effectiveness for tax professionals, and

the finding that 22% of small businesses associate neither tax professionals nor the ATO with

cost effectiveness, this could provide a relatively more effective return on effort as a focus for

engagement and communication activities, although not in isolation of other critical service

attributes.

Figure 16: Comparison of attributes, ATO vs Tax professionals, total (%)

QE1. For this next question, I’m going to read out some words and I’d like you to tell me if that word best represents the

ATO and/or a tax professional or neither. The first word is….


Chart does not show ‘not sure’


46

7. Channel preferences

The qualitative findings indicate that businesses wanted greater support and reassurance from

the ATO, and a more personalised and instructive service. They want to be provided with a

service that is attentive, patient, responsive, friendly and approachable. Regardless of the

channel chosen, they want it to be accessible, time considerate, easy to navigate and effective

at delivering the insight and information they need.

Further to this, there are a number of key considerations that come into play when choosing

which service channel to use to interact/engage with the ATO. These include:

The type of information that is needed, i.e. whether it is general vs specific, whether it

is a transactional request or if they are seeking advice

The degree of urgency and if there is a need for immediate response or access

The efficacy of the source, as well as self-efficacy in terms of use. This consideration is

generally driven by experience

Habit

Prominence of the channel

Depending on these factors, channel preference varies considerably. Further to this, a

continuum based on complexity and urgency of the issue largely underpins channel preference

for small businesses. As outlined in Figure 17, for simpler or less urgent issues, an online

channel is the initial point of contact (in particular the ATO website). This then progresses

through to telephone and then face-to-face contact for more complex or urgent issues.

Figure 17: Service channel continuum

This continuum is vital to understanding the need for specific channels, when they are sought

and for what reason. In conjunction to this, it is also important when considering the type of

content each touch point should offer and the level of service available at each.


47

Digital aptitude

Overall, digital savviness varies and consequently impacts willingness to engage with the ATO in

this manner. Small businesses are accepting that they need to transact with many of their

service providers via online channels, and the majority have at least a base level of comfort in

doing so. This is not, however, the only consideration when evaluating the effectiveness of and

desire for a digital offering. While some small businesses indicate they do as much as they can

online (reflecting their know-how, high levels of self-efficacy, and motivations around efficiency

and access), others prefer human contact. Importantly, this did not always reflect digital

savviness, but a general preference for speaking to someone who can offer an understanding of

their issues in the context of their own lives and situations. Essentially, situation and need have

the potential to override digital aptitude when it comes to defining the service channel sought.

7.1 Assessment of the ATO service channels

Online

Out of the ATO service channels available, the website (ato.gov.au) is the most prominent

service channel used. This is essentially driven by the convenience and accessibility it affords,

and the breadth of information on offer. Content available on the website is largely considered

general, although comprehensive, reliable and up to date. Interestingly, there is the perception

that website content is more current than that offered by other service channels. Further to

this, by contrast to human services (telephone/face-to-face), the website is seen to provide

greater depth of information and proof of evidence of requirements and needs.

That being said, criticism of the website as a service channel focuses on useability/navigability

and clarity of content. Finding the ‘right’ content can be tedious and time consuming and the

information often includes ‘jargon’. What’s more, while there is a provision of information, it

does not offer translation or tailoring to individual needs and personal situations. This often

means that, while information is available, a person-based consultation is still wanted and/or

needed in conjunction with using the website services. Further, there is concern by some small

business when making payment online that they may not necessarily have completed all

relevant steps, leading them to contact the call centre for reassurance.

The internet, in general, is largely thought of as a starting point when it comes to seeking

general information. This can include both navigation to a specific site, such as the ATO’s

website, or a more general search. Once this method is exhausted, and an answer has not been

found, either because the information in not available or easily found, or because it cannot be

understood, other service channels will be sought. This is demonstrated by the service channel

continuum (in Figure 16, above). In this way, if they are referred from another service channel

(i.e. telephone or shop front) back to the website, it can be highly frustrating for small

businesses and detrimental to their perception of the ATO.

Telephone

There is high awareness of being able to access the ATO via the telephone, driven by greater

awareness and accessibility than the ATO’s shop fronts. This service channel is generally used

for more complex or urgent issues due to its personal nature. Its appeal lies in that it allows

human interaction and the capacity for users to ask specific questions and receive tailored

responses.


48

Despite this, there are a number of barriers to its use. Variable service quality, insufficiently

informed staff and the inability to have one point of contact are among the main criticisms of

the telephone service. Call wait times are also considered frustrating to some; however, in

contrast, the automated service is thought to be effective for less complex requirements with

clear advantages in terms of time and access. Having minimal impact on user’s time and

offering a ‘human touch’ are key to this service’s success.

Satisfaction with the service is also dependant on the reason for the call. For transactional

assistance, the majority of small businesses are satisfied with the outcome and the engagement

more broadly. When small businesses are seeking tax or superannuation advice, they expect a

tailored response and are often disappointed with the extent to which the ATO cannot provide

this, highlighting a need to manage this expectation. Similarly, small businesses can become

frustrated when having to repeat their ‘story’ to multiple ATO staff members if their issue is

complex and requires escalation – also suggesting the need to manage expectations of this

process.

SMS

The use of SMS is considered a valuable tool, particularly for notifications and alerts. It is

considered non-threatening and helpful to ensure compliance and timeliness of lodgement by

small business.

Face-to-face

There is relatively low awareness of the face-to-face ATO offering in comparison to the other

service channels, with awareness driven by a mix of those who had experienced or heard about

field audits and those who had heard of or visited shopfronts. Face-to-face interaction at

shopfronts is mostly used for complex, personal, serious or urgent issues. Much like the

telephone service, the appeal of human interaction and ability to ask specific questions and

have responses tailored to personal needs is the key driver of interacting with the ATO in this

way. In-person transactions are also expected to provide a sense of assurance that the purpose

of the transaction has been effectively achieved/completed.

Unfortunately, there is felt to be a degree of inconsistency in the service offered. While some

felt service providers they dealt with were knowledgeable, helpful and supportive, others felt

that they had insufficient knowledge, offered variable and inconsistent service and advice and

the accuracy of information given was questionable at times. Personal accounts also suggested

there is a tendency for ATO service providers to defer to other information sources such as the

internet. As previously mentioned, this is particularly off-putting and frustrating as it is likely

the face-to-face service has been sought because other channels have been exhausted to no

avail.

In addition to this, access to this service was considered limiting and wait times off putting.

Desire for both telephone and face-to-face interaction is strong, however, expectation around

the capabilities and knowledge of staff is high and needs to be met in order for these services to

deliver effectively.


49

Notifications from the ATO

Preferences for how notifications from the ATO are delivered, be it by mail or email, are mixed.

Mail is often taken more seriously and the tangibility it offers is valued. For others, emails are

considered more accessible and easier to retain (“You can file it – you can refer to it 10 years

from now. You can misplace a hard copy.”)/ However, there is concern around security and the

potential to miss receiving it. Despite this, the shift from mail to online notification and email is

considered to be becoming more normal and a future reality.

Specific channel preference for interacting with the ATO

When comparing the opportunities for small businesses to engage with the ATO on specific

topics, there is a clear preference for certain channels, depending on the initial trigger.

Overall the website is the preferred ATO service channel across the breadth of potential triggers

for contact. This mirrors the role of the internet as the preferred source for small businesses

actively seeking information themselves.

As outlined in Figure 18 (p.49), the ATO’s online offering (website or app) is considered the

preferred channel when it comes to:

‘Making a payment’ (69%)

‘Submitting an application to the ATO’ (50%)

‘Providing information or lodging forms’ (48%)

‘Making payments or arrangements for a debt’ (32%)

‘Obtaining general information about tax’ (21%)

When it comes to ‘seeking tax advice relevant to your business’, personal interaction is still

considered key, with the ATO’s phone service being the preferred type of contact (29%). Over

the phone is also important when it comes to ‘making payment arrangements for a debt’

(28%), although slightly less popular than the website.

Interestingly, when it comes to ‘Hearing about changes to tax legislation/regulations’, email is

the preferred method of delivery (42%).

A key area where the ATO could benefit from having a more personal service is for small

businesses seeking tax advice relevant to their business, one in four (24%) indicate they would

not use the ATO for this. Interestingly, this is driven by small businesses that have been in

operation for longer. Only one in ten (10%) of small businesses who have been operating for 10

years or less indicate they wouldn’t use the ATO for this, compared to one in four (24%) who

have been in operation for 11–20 years, and slightly more (27%) businesses who have been in

operation for 21+ years.

Similarly, small businesses in the Running (22%) and Change (28%) life stages drive the trend,

with those in the Start-up phase being significantly less likely to object to using the ATO’s

services (7%).


50

It is also worth noting that newer businesses are more likely to be digitally savvy, showing a

clear preference for online information and email, and less interest in traditional means of

service delivery, like mail/post, compared to those who have been in business longer. In

addition, they are also interested in personal interaction with a higher propensity to engage

over the telephone, compared to older businesses. They also demonstrate a higher willingness

to engage with the ATO across the breadth of contact areas.

Figure 18: Preferred channel for interacting with the ATO (%)

QH1. For each of the following, please tell me how you would ideally prefer to interact with the ATO.




51

8. Drivers of engagement with the ATO

Satisfaction with the ATO

Over one third (37%) of small businesses are satisfied with the ATO’s ability to provide advice,

support and information for their business, the same proportion (37%) are neutral in their

sentiment, while one in five (19%) are dissatisfied (see Figure 19). While the incidence of

satisfaction may seem disappointing, there are far more small businesses satisfied than not,

with a clear opportunity to move the small businesses that are currently ‘on the fence’ (a

receptive audience) via a range of potential initiatives.

It is also important to note that satisfaction is a perception that is not necessarily grounded in

actual experience and, in particular, recent experience. It can therefore be the result of various

misconceptions, as well as experiences from many years ago.

Figure 19: Overall satisfaction with the ATO (%)

QG1. Using a scale of 1 to 5 where 1 is very dissatisfied and 5 is very satisfied, overall, how satisfied are you with the

ATO’s ability to provide advice, support and information for your business?




Interestingly, satisfaction with the ATO is positively influenced by contact with the ATO in the

last 12 months. Two in five (40%) small businesses who have engaged with the ATO in the last

12 months indicate they are satisfied, significantly more compared to 28% satisfaction among

those who have not (see Figure 20 – p.51).

There is also a correlation between experience in managing business administration and

satisfaction with the ATO. In this case, the more experience one has managing business

administration the more likely they are to be dissatisfied with the ATO, suggesting a certain

cynicism among this cohort. (This is referring to their experience with managing business

administration as a whole and not necessarily the length of time their current business has been

in operation).

The annual turnover of small business also impacts their level of satisfaction, with those with an

annual turnover of less than $75,000 more likely to be satisfied (39%, with 15% very satisfied

– the highest of any group).


52

Figure 20: Overall satisfaction with the ATO, by subgroup (%)

G1. Using a scale of 1 to 5 where 1 is very dissatisfied and 5 is very satisfied, overall, how satisfied are you with the ATO ’s

ability to provide advice, support and information for your business?





53

Driver analysis

Based on the qualitative research, a range of key attributes towards the ATO were measured, to

help explain small businesses’ engagement with the organisation.

Multivariate statistical analysis was undertaken to explore the relationship between the

measured attributes and overall satisfaction, enabling identification of the relative impact, or

importance, of each attribute on overall satisfaction. By examining the strength of agreement

with these attributes, in combination with their relative impact on overall satisfaction, we can

then categorise attributes into the following groups (this is illustrated in Figure 21, below).

1. High importance, high performance (top right box) – these attributes have a strong

impact on overall satisfaction, and are performing well. Generally, they need to be

maintained at current levels by the ATO, and used as core engagement/communication

tools.

2. High importance, low performance (top left box) – these attributes also have a strong

impact on overall satisfaction, but are not performing well. They are a focus for

improvement to increase positive engagement.

3. Low importance, high performance (bottom right box) – these attributes while

performing well, do not impact strongly on overall satisfaction. As such, focusing too

much on these attributes to strengthen engagement will have little impact. They are the

“nice to have” components of the engagement strategy.

4. Low importance, low performance (bottom left box) – these attributes are neither

important to overall engagement, nor performing well. While improving these will have

some impact on overall engagement, they will not have the same impact as those with

higher importance. As such, they are considered a secondary focus for improving

engagement.

While the differentiation between stronger and weaker performance can be arbitrarily set at any

point, as a rule of thumb, service industries define their top level of performance (boxes on the

right) at 70–100%. An attribute is considered to be a strong performer with an agreement or

satisfaction rating of 70% or more.

Figure 21: Explanation of driver analysis


54

As outlined in the following figure, there are four key drivers of engagement for the ATO:


I feel the ATO listens to the needs of small business


The ATO are on (not on) my side

These four attributes collectively account for three quarters (76%) of the strength of

satisfaction (or engagement) with the ATO, while the remaining twelve attributes collectively

account for only one quarter. As such, these four attributes can be considered the key drivers of

engagement, and should be the focus of engagement and communication activities.

An important result of this analysis, as demonstrated in Figure 22 (p.54), is that there are no

attributes that sit in the top right-hand box, indicating that there are no clear strengths that the

ATO can currently lay claim to with respect to engaging with small businesses. While this is a

disappointing result, this must be considered within the context (as established in the

qualitative research) that many businesses consider the ATO as a regulator, which immediately

places them in a difficult position to record very strong positive results.


55

Figure 22: Driver analysis

QF1/2. Using a scale of 1 to 5 where 1 is strongly disagree and 5 is strongly agree, how much do you agree or disagree

with the following statements.


Note – Statements that were negative in nature have had their scale reversed for the purposes of consistent presentation

and interpretation in this grid, i.e. the percentage that disagree with the statement has been plotted, rather than the

percentage that agree with the negative statement


56


Along with listening to the needs of small business, providing the right information to meet

their needs is the most important driver of engagement with the ATO. As demonstrated in

Figure 23 (p.57), overall, 52% of small businesses agree that this is currently happening, with a

further 21% neither agreeing nor disagreeing, and 18% disagreeing that this is current

practice. As outlined in the figure below, there are a number of characteristics that impact

positively on this, in particular recency of contact with the ATO (more recent contact has a

significantly positive impact), experience in managing business administration (less experience

are more positive), and annual turnover (lower turnover are more positive).

Qualitative findings suggest that the ATO is commonly seen as a source of general information

on taxation issues, but may not be meeting the needs of businesses in other ways. Most

notably, the research highlighted poor perceptions of the ATO’s capacity to assist businesses

attempting to negotiate issues, and/or to clarify areas of confusion or concern with regard to

tax and superannuation advice. ATO resources (most prominently the website, but also the

telephone service) were often regarded as a sensible place to source general information about

an issue, but they rarely provided sufficiently tailored or detailed advice. In this way, the ATO

was viewed as a reasonably useful starting point – providing a preliminary ‘overview’ of the

issues, but consultation of other sources would be needed as well in order to obtain more

detailed, personalised or specific advice.

Figure 23: Agreement with the statement ‘The ATO gives me the right information to meet my needs’ (%)


the following statement…. The ATO gives me the right information to meet my needs.


Chart does not show ‘don’t know’/ ‘Not applicable’. Chart may not add to 100% due to rounding


57


As the equal most important driver of engagement with the ATO, it is disappointing that less

than one quarter (23%) agree that the ATO listens to their needs. Nearly two in five small

businesses (39%) actively disagree that this is the case, with a further quarter (26%) neither

agreeing nor disagreeing. Again, we see that those who have had recent contact with the ATO

are significantly more likely to be satisfied, as are those who have less experience in managing

business administration (see Figure 24, below).

Aligned to the findings regarding provision of the right information, the qualitative research

suggested that many businesses were sceptical about the extent to which the ATO were either

interested in or attuned to the needs of small businesses. This reflected a perception that the

ATO service was fairly perfunctory and generic, offering little opportunity for discussion or

consultation.

Figure 24: Agreement with the statement ‘The ATO listens to the needs of small businesses’ (%)


the following statement…The ATO listens to the needs of small business.





58


Slightly over one quarter (27%) of small businesses agree that dealing with the ATO is simple,

while two in five (41%) disagreed, and one quarter (25%) neither agreed nor disagreed.

Businesses who have had contact with the ATO in the last 12 months were more likely to be

satisfied, as were those who had been in business administration for 3 to 5 years, and those

with an annual turnover of less than $75,000 (see Figure 25, below).

There was extensive criticism around the accessibility of ATO services and information in the

qualitative research. A number of ATO channels contributed to this perception, e.g. the website,

the telephone service and written communications, including paper and website. Access is

clearly a significant issue for many small businesses, and this is a core barrier to engaging with

the ATO. This suggests that accessibility and usability should continue to be a focus for the ATO

across its service suite, taking into consideration the findings reported in Section 7.

Figure 25: Agreement with the statement ‘Dealing with the ATO is simple’ (%)

QF2. Using a scale of 1 to 5 where 1 is strongly disagree and 5 is strongly agree, how much do you agree or disagree with the following statement… Dealing with the ATO is simple’.





59


Over two in five (44%) small businesses believe the ATO is on their side, with one quarter

(25%) of the opposite opinion, and a further quarter (26%) neither agreeing nor disagreeing.

Again, recency of contact with the ATO has a significant influence, with small businesses who

have had contact with the ATO in the last 12 months more likely to believe the ATO is on their

side than those with less recent contact (see Figure 26, below).

Overall, both the qualitative and quantitative components of the research revealed mixed

attitudes to the ATO and its relationship with small business. While many recognised that the

ATO had a role to assist businesses in understanding and negotiating their tax requirements,

the agency was also strongly associated with enforcement and penalty. As a result, for some in

the study, there was a sense of wariness about engaging with the ATO, and questions around

whose ‘side’ they were really on.

Figure 26: Agreement with the statement ‘the ATO are on my side’ (%)


the following statement… the ATO are on my side..

BASE: All respondents Chart may not add to 100% due to rounding


* Note – the statement read to respondents was “The ATO are not on my side”. The scale has been reversed for analysis

purposes to be positive and consistent with other statements


60

9. Appendix A - Questionnaire

Small Business Engagement Research

(CATI Questionnaire final as at 26/11/15_SCH FEEDBACK)

SECTION A: INTRODUCTION & SCREENING

Good morning/afternoon, my name is _____ from Q&A Research, a social research company.

Could I please speak with <insert name from list if available>, the business owner, who is

responsible for managing the financial affairs of the business?

[IF NOT AVAILABLE, ARRANGE CALL BACK]

[ONCE THROUGH TO CORRECT PERSON, RE-INTRODUCE AND ADD]:

We are currently carrying out a research study on behalf of the Australian Government regarding

small business needs and how you would like to receive information and interact with government.

This is an important opportunity to have your say and help shape future engagement between

yourself, as a small business owner, and the government. The survey will take about 15 minutes

to go through. We are bound by a strict code of ethics and national privacy principles, which means

your individual responses will be kept strictly confidential, and only aggregated data will be

reported back to our client.

Offer to read out Privacy Policy if asked.

As a Market Research company, we comply with the requirements of the Privacy Act. Would

you like me to read out the details of how Q&A Research complies with the Privacy Act?

In accordance with the Privacy Act, once information processing has been completed, 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 that your name and contact details remain with your survey responses,

which will be approximately 2 to 4 weeks, you will be able to contact us to request that some or

all of your information be deleted.


61

The study is being undertaken by TNS Social Research, an independent research company,

who are working with Q&A Research to complete the survey.

Participation is voluntary; however we would appreciate the valuable input you can provide to

the study.

Do you have time to talk now, or should I make an appointment to call you back?

[ARRANGE CALLBACK ACCORDINGLY]

[IF FURTHER INFORMATION REQUIRED:]

The study has been commissioned by the ATO and is being undertaken by TNS Social

Research, an independent research company, who are working with Q&A Research to

complete the survey.

The survey has been approved by the Australian Government Statistical Clearing House. The

approval number is 02475 – 01. You may phone the Statistical Clearing House on 02 6252 5285

to verify the approval number.

Your details have been sourced from a Dunn and Bradstreet list. You were randomly selected

to take part in this research.

To contact the ATO about this survey, call Terri Field, Small Business Engagement and

Support, on 07 3149 5026


62

ASK ALL:

To start off with, I have a few questions about you and your business....

SC1. How long have you been involved in managing the business administration of this (or

other) businesses?

SINGLE RESPONSE

Less than one year 1

1 – 2 years 2

3 – 5 years 3

6 – 10 years 4

11 – 20 years 5

21 years + 6

I don’t manage the business administration 7 TERMINATE.

GO TO

SECTION K

CLOSE AND

READ

TERMINATION

SCRIPT.

Don’t know/can’t remember 99

Prefer not to say 97

SC2. Where is your main business location?

SINGLE RESPONSE. PROMPT IF NECESSARY.IF MENTION ‘OVERSEAS’, ASK: Where is the

main location in Australia?

IF MULTIPLE LOCATION IN AUSTRALIA CLARIFY: This is where you have the largest part of

your business

Sydney 1 CHECK QUOTAS

State Sample size

(per state)

NSW, VIC n=150 n=300

QLD, WA, SA n=100 n=300

TAS, NT n=75 n=150

ACT n=50 n=50

TOTAL n=800

NSW – other 2

Melbourne 3

VIC – other 4

Brisbane 5

QLD – other 6

Perth 7

WA – other 8

Adelaide 9

SA – other 10

TAS 11


63

NT 12

ACT 13

SC3. What was your approximate turnover for the financial year 2014-2015? IF NECESSARY: That is from the 1st of July 2014 until the 30th of June 2015 IF NECESSARY: Turnover is also known as ‘Gross sales’ or ‘revenue’

READ OUT.

Less than $75,000 1 MONITOR

NUMBERS $75,000 - $2 million 2

Over $2 million 3 COUNT & TERMINATE GO TO SECTION K

CLOSE AND READ TERMINATION SCRIPT.

Do not wish to answer 6 TERMINATE GO TO SECTION K CLOSE

AND READ TERMINATION SCRIPT.

SC4. Is your business set up as a…?

READ OUT. MULTIPLE RESPONSE ALLOWED

Sole trader 1 GO TO SC6

Partnership 2

Company 3

Trust 4

(Self-managed super fund) 5 DO NOT READ OUT

(Do not wish to answer) 6 DO NOT READ OUT

ASK IF SC4=2-4

SC5. How many people are currently employed in your business, not including contractors,

volunteer staff or yourself?

SINGLE RESPONSE

(INTERVIEWER NOTE: This is the total number, including part time and casual staff)

0 1

1–5 employees 2

6–10 employees 3

11–20 employees 4


64

More than 20 employees 5

Unsure 9 TERMINATE. GO TO SECTION K CLOSE AND

READ TERMINATION SCRIPT.

SC6. Is your business registered for GST?

SINGLE RESPONSE

Yes 1

No 2

Don’t know 9

SC7. And can I confirm that your business is in the <INSERT INDUSTRY TYPE FROM SAMPLE>

?

CODE AS CONFIRMED BY RESPONDENT.

Agriculture, Forestry and Fishing 1

Mining 2

Manufacturing 3

Electricity, Gas, Water and Waste Services 4

Construction 5

Wholesale Trade 6

Retail Trade 7

Accommodation and Food Services 8

Transport, Postal and Warehousing 9

Information Media and Telecommunications 10

Financial and Insurance Services 11

Rental, Hiring and Real Estate Services 12

Professional, Scientific and Technical Services 13

Administrative and Support Services 14

Public Administration and Safety 15

Education and Training 16

Health Care and Social Assistance 17

Arts and Recreation Services 18


65

Other Services 19

Other (please specify)_____________________________ 96

Unsure 99

SC8. Which of the following best represents the stage your business is currently in?

READ OUT. SINGLE RESPONSE

My business is in the early stages (start-up phase) 1

The business is established 2

The business is about to go through major changes (e.g. expanding,

downsizing, changing direction)

3

I am considering exiting the business (e.g. selling, closing, transferring

ownership)

4

(Do not read out) Prefer not to answer 97

(Do not read out) Don’t know 99

SC9. How long has your business been in operation?

SINGLE RESPONSE

Less than one year 1

1 – 2 years 2

3 – 5 years 3

6 – 10 years 4

11 – 20 years 5

21 years + 6

Don’t know/can’t remember 99

Prefer not to say 97


66

SECTION B: CURRENT PERCEPTIONS

ASK ALL

QB1. Using a scale of one to five where 1 is extremely negative and 5 is extremely positive, how

positive or negative would you say you are currently feeling about how your business is

performing at the moment?

Extremely negative

Extremely

positive DK N/A

1 2 3 4 5 99 98

QB2. And using the same scale of one to five, how are you feeling about the future of your

business, in say 12 months from now?

PROMPT IF NECESSARY: A rating of one is extremely negative and 5 extremely positive.

Extremely negative

Extremely

positive DK N/A

1 2 3 4 5 99 98

QB3. What were your main business priorities when you first started this business? PROBE:

Anything else?

DO NOT READ OUT. MULTIPLE RESPONSE.

Registering business name 1

Applying for ABN 2

Completing trade/professional qualifications 3

Getting finance/a loan/cashflow 4

Setting up website 5

Getting customers/clients 6

Marketing/advertising 7

Sourcing/buying supplies/stock 8

Securing premises/fit out 9

Sorting out business administration/setting up administration systems 10


67

Getting staff 11

Making money 12

Setting financial targets 13

Looking at the industry and what others were doing 14

Obtaining business insurances 15

Other (specify) 98

QB4. Again, thinking about when you first started your current business, where did you go for

advice or information on these issues? PROBE: Anywhere else?

DO NOT READ OUT. MULTIPLE RESPONSE

Australian Taxation Office (ATO) 1

State government business websites 2

Business.gov.au (in Department of Industry, Innovation and Science) 3

Accountant 4

Bookkeeper 5

Tax agent 6

BAS agent 7

Other businesses 8

Business partner 9

Family, friends 10

Business/industry associations 11

Course, training program/seminar 12

Books, guides, leaflets 13

Online business/industry forums 14

Internet/Google search 15

Superannuation company 16

Mentor 17

Bank/Financial Planner 18


68

Previous experience/knowledge 19

Department of Fair Trading 20

Fair Work Australia 21

Small Business Commissioner 22

Other (please specify) 98

No where 99

QB5. When did you first start thinking about your business tax requirements? Would it be…

READ OUT. SINGLE RESPONSE. INTERVIEWERS: PLEASE PROMPT RESPONDENT TO

ANSWER AS THEY HEAR THE OPTION THAT BEST APPLIES TO THEM.

Before you started the business 1

As soon as the business started operating 2

When your accountant/tax professional brought it to your attention 3

When you received/wrote your first invoice 4

When it was time to lodge your first business tax return 5

Reached GST ($75k) 6

(DO NOT READ OUT)I haven’t started thinking about business tax

requirements yet

7

(DO NOT READ OUT) Other (specify) 98

(DO NOT READ OUT) Can’t remember 99

QB6. Using a scale of 1 to 5, where 1 is not at all confident and 5 is very confident, how

confident are you in managing your business tax requirements?

Not at all confident

Very

confident DK N/A

1 2 3 4 5 99 98

QB7. What concerns or issues, if any, do you have in relation to managing your business tax

requirements? PROBE: Anything else?

DO NOT READ OUT. MULTIPLE RESPONSE ALLOWED


69

Not knowing if I’m doing the right thing 1

Knowing/keeping up to date on tax regulations/laws 2

Record keeping 3

Managing cash flow 4

Staff tax issues (PAYG, superannuation) 5

GST related issues 6

End of year accounting 7


No concerns 97

Don’t know 99


PROBE FULLY.

Yes 1

No, not at all 2 GO TO SECTION C

Not yet, but might 3 GO TO SECTION C

Can’t remember 9 GO TO SECTION C


SINGLE RESPONSE

QB9b. Anywhere else? MULTIPLE RESPONSE

QB9a QB9b

Australian Taxation Office (ATO) phone 1 1

Australian Taxation Office (ATO) service centre 2 2

ATO Website 3 3

Other government departments 4 4

Business.gov.au 5 5


70

Accountant 6 6

Bookkeeper 7 7

Tax agent 8 8

BAS agent 9 9

Other businesses 10 10

Business partner 11 11

Family, friends 12 12

Business/industry associations 13 13

Course, training program/seminar 14 14

Books, guides, leaflets 15 15

Online business/industry forums 16 16

Google search 17 17

Superannuation company 18 18

Mentor 19 19

Other (please specify) 98 98

No where 99

No other 99


71

ALTERNATE SECTIONS C & D BETWEEN RESPONDENTS TO AVOID BIAS

SECTION C: TAX PROFESSIONALS

For this next set of questions, I’ll be asking you some questions about tax professionals. For

example tax agents, BAS agents, accountants and bookkeepers.

QC1. Thinking now specifically about these tax professionals, what is the main business tax

activity you used them for within the last year? PROBE: Anything else?

DO NOT READ OUT. MULTIPLE RESPONSE

Business structure/Business Planning 1

Business Activity Statement (BAS) related 2

GST management 3

Income and deductions/depreciation

information/advice/management

4

Pay as you go (PAYG) 5

Record keeping: systems, maintenance 6

Advising on tax regulations, legal changes, updates 7

Superannuation 8

Tax advice 9

Tax preparation 10

Tax payments 11

Annual tax returns 12

General advice/information 13


Don’t know/refused 99 GO TO

SECTION D

I don’t use a tax professional 97 GO TO

SECTION D


72

QC2. What benefits are there to using a tax professional? (Prompt if necessary: For example

tax agents, BAS agents, accountants and bookkeepers.) PROBE: Anything else?

DO NOT READ OUT. PROBE FULLY. MULTIPLE RESPONSE ALLOWED

Personalised service 1

Knows my business 2

Saves me time 3

Cost effective 4

Financial benefits 5

Trust/confidence 6

On my side/work for me 7

Reliable 8

Easy to get hold of/access 9

Not having to do it myself 10

Have the tax knowledge/expertise 11

Familiarity with the ATO and the way they work 12

Habit 13


Don’t know 99


73

SECTION D: ATO

Now I’d like you to think about the Australian Taxation Office or ATO for this next set of questions.

QD1. Within the last year, what are the reasons you would generally interact with the ATO for?

PROBE: Anything else?

DO NOT READ OUT. PROBE FULLY. MULTIPLE RESPONSE

Business structure 1

Business Activity Statement (BAS) related 2

GST management 3

Income and deductions information/advice/management 4

Pay as you go (PAYG) 5

Record keeping: systems, maintenance 6

Advising on/questions about regulations, legal changes,

updates

7

Superannuation 8

Tax advice 9

Tax preparation 10

Tax payments 11

Payment arrangements (for debt) 12

Annual tax returns 13

General advice/information 14

Arranging payment extensions 15

Error in tax return 16

When didn’t understand something 17

Needing to change/update details 18


Don’t know/refused 99 GO TO QD3


74

I don’t interact with the ATO at all 97 GO TO QD3

I have not interacted with the ATO in the last year 100 GO TO QD3

QD2. What benefits are there to interacting with the ATO? PROBE: Anything else?

DO NOT READ OUT. PROBE FULLY. MULTIPLE RESPONSE ALLOWED

Up to date information/current 1

Saves me time 2

Free/no cost involved 3

Easy to get hold of/access 4

Trust/confidence 5

Hear information straight from them 6

Reliable 7

Accurate information 8

Helped me in the past 9

Can only do this or get it from ATO 10

They know what they are talking about/knowledgeable 11

Friendly 12


None 99

QD3. Are there specific times in the life of your business where you most need business tax

advice or information from the ATO?

DO NOT READ OUT. PROBE FULLY. MULTIPLE RESPONSE ALLOWED.

Prior to officially starting the business 1

First few months of running the business 2

First year of running the business 3

Earning over $75,000/change to GST reporting 4

End of first financial year 5

End of financial year any time 6


75

Business Activity Statement related 7

Employing staff/contractors 8

Expanding the business 9

Exiting a business 10

Changing the business structure 11

Reacting to a debt/payment requirement 12

Understanding a change in legislation/regulations 13

All the time 14

No particular time, just as needed 15

No, just when they contact or send something to me 16


No 99


76

SECTION E: ASSOCIATIONS

QE1. For this next question, I’m going to read out some words and I’d like you to tell me if that

word best represents the ATO and/or a Tax Professional or neither.

(Interviewer prompt if needed: If you have had little or nothing to do with a tax agent or

ATO, we are still interested in your thoughts.)

The first word is…

READ OUT. RANDOMISE. SINGLE RESPONSE

ATO Tax

professional

Both Neither Not sure

a. Trusted 1 2 3 4 9

b. Reliable 1 2 3 4 9

c. Efficient 1 2 3 4 9

d. Capable 1 2 3 4 9

e. Knowledgeable 1 2 3 4 9

f. Cost effective 1 2 3 4 9

g. Consistent 1 2 3 4 9

h. Accessible 1 2 3 4 9

i. Approachable 1 2 3 4 9


77

SECTION F: ENGAGEMENT PROFILE

ASK ALL

QF1. Using a scale of 1 to 5 where 1 is strongly disagree and 5 is strongly agree, how much do

you agree or disagree with the following statements.

[INTERVIEWER PROMPT IF NECESSARY: 1 means strongly disagree and 5 means strongly

agree]

READ OUT. RANDOMISE ORDER

Strongly disagree

Disagree Neither

agree nor disagree

Agree Strongly

agree DK N/A

a) I have no idea what the ATO could do to help my business

1 2 3 4 5 99 98

b) I’m the kind of person that will proactively seek out all the information I need about tax.

1 2 3 4 5 99 98

c) I’ll deal with business taxation issues only when needed

1 2 3 4 5 99 98

d) I’d like to understand my business’ tax requirements and obligations better

1 2 3 4 5 99 98

e) I want personalised service when dealing with my business tax requirements

1 2 3 4 5 99 98

f) I’d prefer the ATO to contact me directly when there have been changes to tax

1 2 3 4 5 99 98

QF2. Using the same scale, how much do you agree or disagree with the following statements

about the ATO?

[INTERVIEWER PROMPT IF NECESSARY: 1 means strongly disagree and 5 means strongly

agree]

READ OUT. RANDOMISE ORDER

Strongly disagree

Disagree Neither

agree nor disagree

Agree Strongly agree

DK N/A

a) Dealing with the ATO is simple 1 2 3 4 5 99 98

b) I would prefer to contact a tax professional before contacting the ATO if I need help with my tax

1 2 3 4 5 99 98


78

c) I feel that the ATO listens to the needs of small business

1 2 3 4 5 99 98

d) The ATO are not on my side 1 2 3 4 5 99 98

e) I needed the ATO more when I first started the business than I do now

1 2 3 4 5 99 98

f) The ATO gives me the right information to meet my needs

1 2 3 4 5 99 98

g) The ATO is more about compliance than helping small businesses

1 2 3 4 5 99 98

h) The ATO is never going to help you save money

1 2 3 4 5 99 98

i) The ATO does not do enough to support new businesses when they are first setting up

1 2 3 4 5 99 98

j) I’d prefer to have nothing much to do with the ATO

1 2 3 4 5 99 98


79

SECTION G: PERFORMANCE

ASK ALL:

QG1. Using a scale of 1 to 5 where 1 is very dissatisfied and 5 is very satisfied, overall, how

satisfied are you with the ATO’s ability to provide advice, support and information for your

business?

Very dissatisfied

Very

satisfied DK N/A

1 2 3 4 5 99 98


80

SECTION H: CHANNEL PREFERENCES

ASK ALL:

QH1. For each of the following, please tell me how you would ideally prefer to interact with the

ATO.

READ OUT. RANDOMISE. SINGLE RESPONSE

Online

(website or app)

Via email Over the

Phone Face to

face

Would not use ATO for

this

Mail/post

Not sure

a. Obtaining general information about tax

1 2 3 4 5 6 9

b. Seeking tax advice relevant to your business

1 2 3 4 5 6 9

c. Submitting an application to the ATO eg; Tax File Number, GST, ABN (via ABR)

1 2 3 4 5 6 9

d. Providing information or lodging forms eg; updating personal info, lodging BAS or tax returns, providing info requested by ATO (eg; for an audit)

1 2 3 4 5 6 9

e. Making a payment 1 2 3 4 5 6 9

f. Making payment arrangements for a debt

1 2 3 3 5 6 9

g. Hearing about changes to tax legislation/regulations

1 2 3 4 5 6 9


81

SECTION I: DIGITAL ENGAGEMENT

ASK ALL:

QI1. There is an increasing focus on interacting online for businesses and customers. Thinking

about the internet specifically, which of the following do you feel best represents you

personally…?

(Note: this is in relation to them personally, not the business).

READ OUT. RANDOMISE 1-4, then 4-1.

I use the Internet for a few things but it’s not my primary source of news or

entertainment. I tend not to use social media all that much, if at all

1

I use social media on occasion, but the internet is my primary source of news,

entertainment and information.

2

While I use the internet for a few things, using social media is the main thing I

do online

3

I rely on digital and social media constantly throughout the day in all parts of

my life

4

I don’t use the internet at all/not sure (DNRO) 99

SECTION J: BUSINESS CHARACTERISTICS

ASK ALL:

READ OUT: And just one more question to ensure we are talking to a range of people…

QJ1. Have you undertaken any of the following types of training in business management or

administration?

READ OUT. MULTIPLE RESPONSE

University degree or diploma 1

Full-time TAFE course 2

Short courses at TAFE or other private institutions 3

Industry course 4

Chartered Accountant (CA) or Certified Practicing Accountant (CPA) 5


82

qualification

(Do not read out) None of the above 99

(do not read out) Prefer not to say 97

SECTION K: CLOSE

Thank you very much for your participation in our survey. Just to confirm, all the answers you

provided are treated in the strictest confidence and will be aggregated with other people’s answers

for analysis. They will not be passed on to anyone or anywhere else.

In case my supervisor needs to contact you to check the validity of this interview, could I please

confirm some details?

RESPONDENT’S FIRST NAME: ____________________

PHONE: _______________________________________

COMPANY NAME: _______________________________

As a Market Research company, we comply with the requirements of the Privacy Act. Would you

like me to read out the details of how Q&A Research complies with the Privacy Act (again)?

In accordance with the Privacy Act, once information processing has been completed, 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 that your name and contact details remain with your survey responses, which will be

approximately 2 to 4 weeks, you will be able to contact us to request that some or all of your

information be deleted.

In case you missed it earlier, my name is <………> from Q&A Research. If you would like to

contact my supervisor to check the validity of this study you can call (07) 3369 2299.

IF NECESSARY: The survey has been commissioned by the ATO and is being undertaken by TNS

Social Research, an independent research company. You can contact: Catherine Smithers at TNS

on 02 9563 4250 for any further information on this project.


83

Thank you for your time. TERMINATION SCRIPT:

Thank you for your time. Unfortunately we have reached the allocated quota for this study and I

will need to leave the survey there

Just to confirm, all the answers you provided are treated in the strictest confidence and will be

aggregated with other people’s answers for analysis. They will not be passed on to anyone or

anywhere else.

In case my supervisor needs to contact you to check the validity of this interview, could I please

confirm some details?

RESPONDENT’S FIRST NAME: ____________________

PHONE: _______________________________________

COMPANY NAME: _______________________________

As a Market Research company, we comply with the requirements of the Privacy Act. Would you

like me to read out the details of how Q&A Research complies with the Privacy Act (again)?

In accordance with the Privacy Act, once information processing has been completed, 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 that your name and contact details remain with your survey responses, which will be

approximately 2 to 4 weeks, you will be able to contact us to request that some or all of your

information be deleted.

In case you missed it earlier, my name is <………> from Q&A Research. If you would like to

contact my supervisor to check the validity of this study you can call (07) 3369 2299.

IF NECESSARY: The survey has been commissioned by the ATO and is being undertaken by TNS

Social Research, an independent research company. You can contact: Catherine Smithers at TNS

on 02 9563 4250 for any further information on this project.

Thank you for your time.


84

[IF FURTHER INFORMATION REQUIRED:]

The study has been commissioned by the ATO and is being undertaken by TNS Social

Research, an independent research company, who are working with Q&A Research to

complete the survey.

The survey has been approved by the Australian Government Statistical Clearing House. The

approval number is ####. You may phone the Statistical Clearing House on 02 6252 5285 to

verify the approval number.

Your details have been sourced from a Dunn and Bradstreet list. You were randomly selected

to take part in this research.

To contact the ATO about this survey, call Terri Field, Small Business Engagement and

Support, on 07 3149 5026


85

10. Appendix B – ‘Start-up’ discussion

guide

FOCUS GROUP DISCUSSION GUIDE: START-UPS

MODERATOR NOTES

As part of the Australian Taxation Office’s (ATO’s) reinvention program and the push towards a


facilitate their relationship with small businesses, their interactions, approachability and aptitude to

help them fulfil their tax and superannuation obligations.

The ultimate aim of the research is to inform the development of the ATO’s strategic approach to

facilitating interaction and engagement with the small business community. The research will

provide a clearer understanding of user perceptions of and preferences for engaging with the ATO,

thereby providing a clear path forward for a customer-centric strategy, which aims to meet the

needs of small businesses.

The primary focus of this stage of the study will be on ascertaining the attitudes and perceptions of

small businesses, with a focus on understanding drivers and barriers to interacting with the ATO,

and using different access points/channels, including digital services. The findings from this stage

of research will provide context for the development and refinement of a tailored strategic approach

for facilitating small business interaction with the ATO.

Secondary objectives of this stage include:

To identify the triggers and drivers to engaging with the ATO at different stages of the business

life-cycle;

To better understand experiences of and reactions to the ATO’s access points and service

channels, establishing the motivators and fundamental resistance or barriers to use by different

target groups;

To explore online behaviour generally and gain an understanding of the drivers of use of ATO

online services specifically.


86

Group schedule

The research will involve n=8 groups (each including 6 participants) and n=5 individual in-depth

interviews with different types of business. Research will be conducted in Sydney, Brisbane,

Ballarat and Mandurah.

Group characteristics

Participants will be the owners or financial decision makers of small businesses. Additional

specifications are described as follows – these are key variables to consider in the analysis of

findings:

Business life-cycle:

• Start-ups

New businesses, whose focus is on setting up and establishing their business

• Running

Businesses who are established, and focussed on growing further in a normal/ organic manner

• Change

More mature businesses considering making significant changes to the business or exiting/

winding up

Business sizes:

• Non-GST

Turnover less than $75k

• Small:

Turnover between $75k- $2million)

Connected Life segments

Participants will be allocated to Connected Life segments using the following statements.


1. I use the Internet for a few things but it’s not my primary source of news or entertainment. I tend not to use social media all that much, if at all. [FUNCTIONAL]

2. I use social media on occasion, but the internet is my primary sources of news, entertainment and information. [OBSERVER]

3. While I use the internet for a few things, using social media is the main thing I do online [CONNECTOR]

4. I rely on digital and social media constantly throughout the day in all parts of my life [LEADERS]

Industries

A mix of industries will be recruited within and across groups/ interviews.


87

Entity types

A mix of entity types will be recruited across fieldwork, including sole traders, partnerships, trusts

and companies.

Employees

There will be representation of businesses without any employees (including contractors) and

those employing up to 19 people.

Guide

This guide should be used with the ‘Start-Up’ business cohort


88

DISCUSSION GUIDE

This guide is intended as an outline only. The discussion may not address all of the topics listed

below, and may not cover them in the order described. There will be considerable scope within the

discussion for exploring issues as they arise. Questions are indicative only of subject matter to

be covered and are not word for word descriptions of the moderator’s questions.

INTRODUCTION AND CONTEXT 5 MINS

Moderator Notes:

The purpose of this section is to clarify the purpose of the research and build rapport with the

participants.

Introduce self

Introduce company and the types of research we do

Thank participants for their time

This will be a very informal discussion

There are no right or wrong answers, interested in different perspectives,

Ask if there are any questions before commencing

Discuss participants confidentiality/ inform about taping discussion (for reporting purposes

only)

1. WARM UP 5 MINS

Moderator Notes: Warm-up

The focus here is to ‘warm up’, establish free-flowing discussion, as well as to explore the

(unprompted) salience of taxation as a concern for business…

Introductions: First name, business type, role, time in operation and number of employees....

Today we’re going to be talking about your experiences as small business owners.

So what made you decide to get into business? What were your expectations of starting a

business? Did you have any concerns?

And how about now that the business in operation? What are the things you like about it? And

the things you’re not so keen on? (Note for mention of red tape, tax requirements – though do

not probe at this stage).

And how do you tend to keep track of the progress of the business? How easy/ hard is it to do

that?


89

2. ATTITUDES TO TAX REQUIREMENTS 5 MINS


The focus here would be on exploring/ unpacking attitudes to business tax requirements generally

to provide a context for understanding drivers and barriers to engaging with the ATO…

IF TAX MENTIONED: Ok, so some of you mentioned the business’ tax requirements….? Can you

tell me a bit more about that…

IF NOT MENTIONED: How about the business’ tax requirements? What do you think of those?

How significant are they for small businesses? In what way? (Note is it seen as a compliance

issue only or for managerial information)

IF SEEN AS A CONCERN…What is it about tax requirements which are a concern for

business? Do you find some parts of the tax system more difficult to deal with than others?

What/ why is that? (Do not probe at this point, but note mention of payroll, PAYG and tax

instalments, BAS requirements, GST return, superannuation etc)

What makes these more difficult?

And which are more straightforward? Why is that? IF NOT MENTIONED: To what extent do

you think small businesses derive benefit from meeting their tax requirements? In what way?

3. APPROACH TO SEEKING INFO/ ADVICE FOR TAX REQUIREMENTS 25 MINS

Moderator Notes:

The focus here is to understand business’ approach to meeting their tax obligations, including the

triggers to engaging with the ATO, and the role of intermediaries in providing assistance…

So let’s think now about when you were first setting up the business… how were you feeling

about the administrative side of things at that stage?

What did you think you needed to do? How confident were you about finding out what you

needed to do? How confident did you feel about doing it?

Did you seek advice or information at this stage? About what specifically did you seek advice

or information? NOTE ON FLIP-CHART (EACH REQUIREMENT ON ONE PAGE)

And how did you go about seeking advice/ info about these things?.... Where did you go?

LIST EVERYTHING MENTIONED ON RELEVANT PAGE.

What were the main reasons you went there to get this advice/ info?


90

PROBE IF NOT MENTIONED: What about some of the other administrative requirements

involved in setting up a business – did you seek advice or information for these…(If so), where

did you go for advice/ info on these topics? (If not), why was that?

o Finding out about the regulations and requirements?

o Deciding on a business structure?

o Getting an ABN?

o Income tax reporting, preparation of the P&L statement (note specific tasks

including determining and reporting fringe benefits, excises)

o Deciding and setting up a record keeping system?

o (if relevant) Registering for the GST?

o (if relevant) employing staff? (setting up PAYG/ super?)

So I can see here that some/ all of you approached the ATO for some of these things…

o What drove you to do so? Why did you see value in contacting the ATO?

o What were you expecting the ATO to provide? What were you hoping to get from

them?

o And to what extent were your needs met? How helpful was the information/ advice

you received? Explore fully…

o PROBE FOR EACH REQUIREMENT…

For those of you who did not approach the ATO for xxx (PROBE FOR EACH

REQUIREMENT), why was that? Did you consider approaching the ATO? Why did you decide

not to do so?

(IF TAX AGENTS MENTIONED)… So I can see here that some/ all of you approached a tax

agent for some of these things…

o What drove you to do so? Why did you see value in contacting a tax agent?

o What were you expecting the tax agent to provide? What were you hoping to get

from them?

o And how did you find the service you received? How helpful was it? Explore fully…


For those of you who did not approach a tax agent for xxx (PROBE FOR EACH

REQUIREMENT), why was that? Did you consider approaching one? Why did you decide not

to do so?

So I can see here that some/ all of you approached some other agencies (COULD INCLUDE

industry groups, COSBOA; other government agencies; financiers) …

o What drove you to do so? Why did you see value in contacting them?

o Do you approach them often for this type of info/ advice?

o What were you expecting them to provide? What were you hoping to get from

them?




For those of you who did not approach these types of agencies (PROBE FOR EACH

REQUIREMENT), why was that? Did you consider approaching them? Why did you decide not

to do so?


91

4. CHANNELS FOR ACCESSING ATO SERVICES 20 mins

Moderator Notes:

The focus here is to understand what underlies choice of service channel for ATO services…

What would be your main considerations when thinking about how to engage with the ATO?

What’s most important? Anything else?

To what extent does this vary for the different things you might want to engage with the ATO

about?

So let’s have another look at the different administrative requirements that you had when you

were setting up your business… REFER TO FLIP CHART… How, ideally, would you like to

engage with the ATO about these issues. Do you prefer the ATO to deliver this info/ advice or

would you prefer to seek it out yourself? If so, how? NOTE EACH CHANNEL MENTIONED ON

THE RELEVANT PAGE:


o Deciding on a business structure?

o Getting an ABN?



o Deciding and setting up a record keeping system?

o (if relevant) Registering for the GST?

o (if relevant) employing staff? (setting up PAYG/ super?)

o ANYTHING ELSE MENTIONED

Why would that be the best way of engaging with the ATO on this topic?

When ideally would you prefer to receive this information/ advice? Just in time or in advance of

when it needs to be done? How far in advance?

And how likely are you to engage with the ATO in this way? Explore why likely/ unlikely…

Have you engaged with the ATO in this way in the past? (IF DIGITAL CHANNELS ARE

MENTIONED PROBE TO CLARIFY WHETHER THEY ARE REFERRING TO A SERVICE

WHERE THEY LOGGED IN OR A SERVICE WHERE THEY DOWNLOADED A TOOL OR

JUST BROWSED THE WEBSITE) If so, how did you find it? How could this channel better

meet your needs?

5. PERCEPTIONS OF SPECIFIC DIGITAL SERVICES 20 mins

Moderator Notes:


92

The focus here is on needs and expectations of the ATO’s digital services and drivers and barriers

to use.

Now let’s focus in a bit more detail on the ATO’s online service channels… We can see on our list

that there are a few things that you would like to do online and a few that you would not…(tailor as

appropriate)

What would you say are the main reasons for that? (nb: costs/ benefits, efficacy/ self-efficacy,

norms, legitimacy, habit, heuristics)

What are the advantages of accessing ATO services online? Disadvantages?

What are the main reasons you would choose not to use a digital or online service? Probe for

each transaction would not do online.

What would make you more likely to do this online?

Perceived appropriateness/ legitimacy of engaging with ATO online? How does this

compare with face-to-face/ telephone contact?

How confident do you feel about using online channels? How hard or easy would it be to do

online?

Can you give any examples of digital services or resources that you have found useful for your

business? (non-ATO)

6. POTENTIAL STRATEGY DIRECTIONS 15 mins

Moderator Notes:

This section will focus on identifying priority drivers and barriers to engaging with the ATO and how

these may inform strategy development

Overall, what could the ATO do to better to meet the needs of small businesses like yours…

When setting up a small business…

o What do businesses most need at this stage? What do they need to know? How

do they want to feel?

o And what do you think would be the most appropriate way for the ATO to meet

these needs… Probe if necessary: information, education, training, conferences,

service enhancement etc…

In the first 12 months of running a small business…

o What do businesses most need at this stage? What do they need to know? How


o And what do you think would be the most appropriate way for the ATO to meet

these needs Probe if necessary: information, education, training, conferences,

service enhancement etc…


93

o Probe: Does social media have a role to play? In what way? Probe for examples.

o How about SMS? When would it be useful to receive SMSes? About what sort of

thing?

What do you think about the ATO providing a more tailored, personalised service experience

for small businesses?

o What, ideally, would you want from a personalised service? Can you think of

anything that a tailored service would be particularly useful for?

o The development of a tailored service would mean that the ATO would need to

collect user information in relation to your business tax requirements and

preferences… What do you think of that? What (if any) type of business

information would you be happy for them to draw on in setting this up? (eg service

preference info/ more detailed tax info)

o IF THEY NEED AN EXAMPLE TO CLARIFY: For example, some ATMs recognise

previous choices when using the ATM and default to withdrawing cash from your

savings a/c (if that’s what you’ve chosen in the past). In other words, data is stored

on your use of an electronic service and used to TAILOR your future experience

7. END

We have reached the end of our time and questions. Is there anything else you would like to

add?

Thank you so much for your time today. Give incentive.


94

11. Appendix C – ‘Running’ discussion

guide

FOCUS GROUP DISCUSSION GUIDE: RUNNING

MODERATOR NOTES

















life-cycle;



target groups;




95

Group schedule







findings:


• Start-ups


• Running

Businesses who are established, and focussed on growing further in a normal/ organic manner

• Change


winding up

Business sizes:

• Non-GST


• Small:










96

Industries


Entity types


and companies.

Employees



Guide

This guide should be used with the ‘Running’ business cohort


97

DISCUSSION GUIDE





INTRODUCTION AND CONTEXT 5

MINS

Moderator Notes:


participants.

Introduce self







only)

1. WARM UP 5 MINS





Today we’re going to be talking about your experiences as small business owners.

So what made you decide to get into business? What were your expectations of starting a

business? Did you have any concerns?

And how about now that the business in operation? What are the things you like about it?

And the things you’re not so keen on? (Note for mention of red tape, tax requirements –

though do not probe at this stage).


98


that?





IF TAX MENTIONED: Ok, so some of you mentioned the business’ tax requirements….? Can you

tell me a bit more about that…





business?

Do you find some parts of the tax system more difficult to deal with than others? What/ why is

that? (Do not probe at this point, but note mention of payroll, PAYG and tax instalments, BAS

requirements, GST return, superannuation etc)


And which are more straightforward? Why is that?

IF NOT MENTIONED: To what extent do you think small businesses derive benefit from

meeting their tax requirements? In what way?


Moderator Notes:



How often do you seek advice or information about your taxation requirements? About what

sort of things? NOTE ON FLIP-CHART (EACH REQUIREMENT ON ONE PAGE)

And how do you tend to go about seeking advice/ info about these things?.... Where do you

tend to go? LIST EVERYTHING MENTIONED ON RELEVANT PAGE.

What are the main reasons you would go there to get this advice/ info?


99

PROBE IF NOT MENTIONED: What about some of the other administrative requirements

involved in running a business – would you be likely to seek advice or information for these…(If

so), where would you tend to go for advice/ info on these topics? (If not), why not?


o Collating GST?

o Completing the BAS?



o (If relevant) employing staff? (setting up PAYG/ super?)

o Maintaining a record keeping system?

Managing cash-flow? So I can see here that some/ all of you would approach the ATO for

some of these things…

o Why do you see value in contacting the ATO?

o What do you expect the ATO to provide? What are you typically hoping to get

from them?

o And to what extent are your needs generally met? How helpful is the information/

advice you receive? Explore fully…


For those of you who do not approach the ATO for xxx (PROBE FOR EACH REQUIREMENT),

why is that? Do you ever consider approaching the ATO for this type of thing? Why/ why not?

(IF TAX AGENTS MENTIONED)… So I can see here that some/ all of you access a tax agent

for some of these things…

o Why do you see value in contacting a tax agent?

o What are your expectations around the service you receive from an agent?

o And how do you typically find the service you receive? How helpful is it? Explore

fully…


For those of you who would not approach a tax agent for xxx (PROBE FOR EACH

REQUIREMENT), why is that?

So I can see here that some/ all of you approached some other agencies (COULD INCLUDE

industry groups, COSBOA; other government agencies; financiers) …


o Do you approach them often for this type of info/ advice?

o What were you expecting them to provide? What were you hoping to get from

them?




For those of you who did not approach these types of agencies (PROBE FOR EACH

REQUIREMENT), why was that? Did you consider approaching them? Why did you decide not

to do so?


100


Moderator Notes:





about?

So let’s have another look at the different administrative requirements that you typically have

as a business owner… REFER TO FLIP CHART… How, ideally, would you like to engage with

the ATO about these issues. Do you prefer the ATO to deliver this info/ advice or would you

prefer to seek it out yourself? If so, how? NOTE EACH CHANNEL MENTIONED ON THE

RELEVANT PAGE:


o Collating GST?

o Completing the BAS?



o (If relevant) employing staff? (setting up PAYG/ super?)

o Maintaining a record keeping system?

o Managing cash-flow?

o ANYTHING ELSE MENTIONED?









meet your needs?

5. PERCEPTIONS OF SPECIFIC DIGITAL SERVICES 20 mins

Moderator Notes:


to use.


101



appropriate)










online?


business? (non-ATO)


Moderator Notes:



Overall, what could the ATO do to better to meet the needs of small businesses in similar

situations to yours …

What do businesses like yours most need from the ATO? What do they need to know? How


And what do you think would be the most appropriate way for the ATO to meet these needs?

Probe if necessary: information, education, training, conferences, service enhancement etc…



thing?

What do you think about the ATO providing a more tailored service experience for small

businesses?







102






on your use of an electronic service and used to TAILOR your future experience

7. END


add?



103

12. Appendix D – ‘Change’ discussion guide

IN-DEPTH INTERVIEW GUIDE: CHANGE

MODERATOR NOTES

















life-cycle;



target groups;




104

Group schedule







findings:


• Start-ups


• Running

Businesses who are established, and focussed on growing further in a normal/ organic manner.

• Change


winding up.

Business sizes:

• Non-GST


• Small:









Industries



105

Entity types


and companies.

Employees



Guide

This guide should be used with the ‘Change’ business cohort.


106

INTERVIEW GUIDE





INTRODUCTION AND CONTEXT 2MINS

Moderator Notes:


participants.

Introduce self







only)

1. WARM UP 3 MINS





Can you tell me a bit about the status of your business at the moment? What are your plans for

the business?

Do you have any concerns about that? (Note for mention of red tape, tax requirements –

though do not probe at this stage).


that?



107




IF TAX MENTIONED: Ok, so you mentioned the business’ tax requirements….? Can you tell me a

bit more about that…





business?

Do you find some parts of the tax system more difficult to deal with than others? What/ why is

that? (Do not probe at this point, but note mention of payroll, PAYG and tax instalments, BAS

requirements, GST return, superannuation etc)


And which are more straightforward? Why is that?

IF NOT MENTIONED: To what extent do you think small businesses derive benefit from

meeting their tax requirements? In what way?


Moderator Notes:



How often do you seek advice or information about your taxation requirements? About what

sort of things? NOTE ON PAD.

And how do you tend to go about seeking advice/ info about these things?.... Where do you

tend to go? PROBE FOR EACH MENTIONED.

What are the main reasons you would go there to get this advice/ info?

PROBE AS APPROPRIATE TO SPECIFIC BUSINESS IF NOT MENTIONED: What about

some of the other administrative and regulatory requirements for the business going forward –

would you be likely to seek advice or information for these…(If so), where would you tend to go

for advice/ info on these topics? (If not), why not?

o Keeping up to date with regulatory/ legal requirements



o Changing business structure?


108

o Selling the business?

o Developing an exit strategy?

o Ceasing trading/ winding up?

So I can see here that you would approach/ed the ATO for some of these things…

o Why do you see value in contacting the ATO?

o What do you expect the ATO to provide? What are you typically hoping to get

from them?

o And to what extent are your needs generally met? How helpful is the information/

advice you receive? Explore fully…


You didn’t mention that you would approach the ATO for xxx (PROBE FOR EACH

REQUIREMENT), why is that? Would you ever consider approaching the ATO for this type of

thing? Why/ why not?

(IF TAX AGENTS MENTIONED)… So I can see here that you would access a tax agent for

some of these things…

o Why do you see value in contacting a tax agent?

o What are your expectations around the service you receive from an agent?

o And how do you typically find the service you receive? How helpful is it? Explore

fully…


And why would you not access a tax agency for xxx (PROBE FOR EACH REQUIREMENT)?

(IF APPROPRIATE) So I can see here that you approached some other agencies (COULD

INCLUDE industry groups, COSBOA; other government agencies; financiers) …


o Do you approach then often for this type of info/ advice?

o What were you expecting then to provide? What were you hoping to get from

them?




OR: Did you ever consider approaching other types of agencies – like industry groups,

COSBOA; other government agencies; financiers)? Why did you decide not to do so?


109


Moderator Notes:





about?

So let’s have another look at the different administrative requirements that you might have as

an owner of a business… REFER TO PAD… How, ideally, would you like to engage with the

ATO about these issues. Do you prefer the ATO to deliver this info/ advice or would you prefer

to seek it out yourself? If so, how?

o Keeping up to date with regulatory/ legal requirements



o Changing business structure?

o Selling the business?

o Developing an exit strategy?

o Ceasing trading/ winding up?

o ANYTHING ELSE MENTIONED?









meet your needs?


110

5. PERCEPTIONS OF DIGITAL SERVICES 10 mins

Moderator Notes:


to use.



appropriate)










online?


business? (non-ATO)


Moderator Notes:



Overall, what could the ATO do to better to meet the needs of small businesses in similar

situations to yours…

What do businesses like yours most need from the ATO? What do they need to know? How


And what do you think would be the most appropriate way for the ATO to meet these needs?

Probe if necessary: information, education, training, conferences, service enhancement etc…



111


thing?

What do you think about the ATO providing a more tailored, personalised service experience

for small businesses?











on your use of an electronic service and used to tailor your future experience.

7. END


add?


ATO Small Business Engagement · ATO – Small Business Engagement 8 On an emotional level, tax...

Documents

Transcript of ATO Small Business Engagement · ATO – Small Business Engagement 8 On an emotional level, tax...