Why are nearly half of all solo tradies tardy on tax?

Jarrod Brown
By Jarrod Brown
5 Min Read

With only two days left on the clock before the October 31 tax deadline, new data has revealed that almost half of independent tradies still haven’t lodged their returns. 

Coming from digital accounting service Hnry and their ‘Sole Trader Pulse’ survey, accountants claim that nearly half of their tradie clients (45 per cent) still haven’t touched their tax returns, deposit the threat of a $313 failure to lodge fine hanging over their heads. 

Are tradies just so cashed up that they don’t mind flushing $300 down the drain? Maybe, but what’s more likely is tradies are just putting off tackling the admin headache.

Survey respondents largely pointed the finger at tax just taking too much time away from the tools, with 43 per cent of tradies claiming they haven’t lodged due to time constraints and 26 per cent reportedly being stressed out by the whole process. 

A small number of tradies (17 per cent) also said they were putting it off because they thought their tax rebates would be worth stuff all, coming from a guy who saw his hex debt widdle his tax return down to a few hundred bucks, fair enough.

But Hnry managing director Karan Anand said that this “tax paralysis” was hardly surprising. The group claim the average self-employed tradie spends over $1,300 and 13 hours preparing their tax return – stealing nearly two working days from their week. 

“Self-employed tradies are essential to our economy, driving infrastructure, building communities and fostering innovation. They’re a thriving, resilient bunch but with the average tax return submission taking 13 hours to complete, it’s no wonder many delay filing,” said Karan.

And that’s exactly what happened to 55-year-old NSW roofer Olsen Joseph, who told Build-it staying on top of his tax burden was an understandable pain in the ass. 

“My tax return preparations used to take up upwards of 10 to 12 hours, on top of my usual weekly financial admin,” he said.

“After a long day on-site, the last thing you want to do is sit at a computer and deal with finances – it’s not my expertise. But for all the advantages of being your own boss, it’s part of the deal. It’s tedious and time-consuming, so you tend to put it off, but that only makes it harder in the long run.” 

Add in sole traders citing challenges in tracking down receipts (25 per cent), uncertainty regarding rebate amounts (21 per cent), and confusion over what can and can’t be claimed as a tax-deductible expense (15 per cent) and copping that lodging fine is looking more attractive by the minute. 

How can you stay on top of tax? 

But, despite the stress, tradies are still going to have to stay on top of their tax one way or another or risk accruing a hefty bill owed to the ATO at the end of the financial year. 

For the tradies who haven’t touched their tax until now, I’ve got some bad news – it’s crunch time. You’ve only got two days to get all of your affairs in order, whether that be getting on your tax agent’s books or completing the process yourself at home, or you’ll be coughing up that $313 fine. 

But for the rest of you who are already stressing about next year’s tax time, Karan says the best way to avoid the last-minute crunch is to stay on top of things as they happen. 

“We know tax and financial admin continues to be a significant drain on productivity,” he said.

“To ease the pressure, keep accurate records year-round, plan early, and don’t hesitate to get a second opinion – whether from a friend, an accountant, or the people at Hnry.”

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Jarrod Brown combines his background in journalism, copywriting and digital marketing with a lifelong passion for storytelling. He has a strong passion for new and emerging consumer technology within the building sector. He lives on the Sunshine Coast - usually found glued to the deck of a surfboard.