Intuit Study Finds Businesses Fear Losing Customers,
Unprepared for the New Tax
MISSISSAUGA, ON, June 23 /CNW/ - Just days before the new Harmonized
Sales Tax goes into effect, many small business owners in British
Columbia and Ontario say they're not ready to comply.
An Intuit survey of small business owners revealed that 54 per cent of
respondents in Ontario and 47 percent in British Columbia won't be ready
to comply with changes, and are worried about the perceived negative
business consequences from the tax.
Why the concern? In the survey, conducted by Angus Reid Public Opinion,
more than three-in-five respondents in both provinces said they didn't
understand the need for the new tax regime. An overwhelming majority of
respondents also fear HST will make consumers more price sensitive (82
per cent in BC and 91 per cent in ON) and could compel their customers
to make purchases in provinces without HST (63 per cent in BC and 54 per
cent in ON).
Given the lack of understanding and sense that the tax could stifle
sales, the majority of respondents in both provinces clearly oppose the
HST (76 per cent in BC and 79 per cent in ON).
HST: The Tax That Binds Small Business
While the public
response to HST varies in the two provinces, the challenges of preparing
for the tax have united small business owners. Similar numbers of
respondents (44 per cent in BC and 45 per cent in ON) said they had "not
nearly enough time to prepare." The two provinces share comparable small
minorities (9 per cent in BC, 7 per cent in Ontario) of small business
owners who feel they've received enough information.
Across the board, few believe the harmonized tax will produce the
promised efficiencies, such as saving time and money, and making small
businesses more competitive. Only 38 per cent of BC respondents and 39
per cent in Ontario acknowledged "saved resources" as a benefit and just
13 per cent in BC and 23 per cent in Ontario believe HST would make
businesses more competitive.
"We've heard quite clearly that HST represents a challenge for small
businesses. However, making the switch doesn't have to be an
overwhelming administrative task," said Gene Lewis, country manager for
Intuit Canada. "Being unprepared will ultimately lead to greater
problems, which is why Intuit is working closely with small business
owners to help them get ready."
The HST Setup Tool in QuickBooks Pro and Premier 2010 sets up the HST
tax rate in a company file and automatically updates all items, vendor
customer and account records to the new tax codes, saving hours of work.
Plus, the Tax Centre in QuickBooks makes HST remittances easy to
complete and eFile.
Many QuickBooks customers benefit from working closely with a QuickBooks
expert. Certified QuickBooks ProAdvisors, located
in communities across the country, can help businesses with HST and
customize QuickBooks for their unique needs.
Is the Grass Greener in Ontario?
While the Intuit survey shows many shared sentiments across the two
provinces, there are also differences. Small business owners in BC have
a "grass is greener" outlook when it comes to the one-time HST
transition credit available only to Ontario small businesses.
Sixty-three per cent of BC respondents said the credit would help small
businesses to deal with the transition if it was available in their
province. Conversely, 71 per cent of Ontario respondents, who are
potential recipients, said they do not consider it effective.
Didn't we do This Before?
The situation is reminiscent of
Atlantic Canada's move to HST in 1997.
"Having gone through that experience as an accountant, it wasn't the
four-alarm fire that it's perceived to be in Ontario and BC," said Peter
Budreski, a Halifax, Nova Scotia-based chartered accountant. "Choosing
to ignore HST will get you nowhere in a hurry. There are benefits
to HST but in order to reap them, it's critical for small business
owners educate themselves and prepare."
Although BC and Ontario small business owners largely oppose the tax,
they do concede, albeit cautiously, that it can bring some long-term
efficiency benefits. Among BC entrepreneurs, almost half (49 per cent)
increase their support for the HST when they understand it can
streamline financial and administrative work. In Ontario, 34 per cent of
respondents agree. In addition, 28 per cent of small business owners in
BC report that boosting investment and jobs will increase their support
for HST, while a much smaller proportion (16 per cent) of their Ontario
counterparts share that opinion.
"Small businesses are struggling with the impact of change and haven't
yet seen the long-term promise," said Lewis. "The experience in Atlantic
Canada does show that getting prepared pays dividends. The lesson is:
prepare now, concentrate on finding the benefits and capitalize."
About Intuit Canada
Intuit Canada ULC is a leading provider
of business, financial and tax management solutions for small- and
mid-sized businesses, consumers and accounting professionals. Its
flagship products and services, including Quicken®, QuickBooks®,
QuickBooks® Enterprise Solutions, SuccèsPME, QuickTax, and
ImpôtRapideMC, simplify personal
accounting, and tax preparation and filing.
Additional offerings include ProFile®, a professional tax
preparation software suite, the QuickBooks ProAdvisor Program and
the Intuit Developer Network for professional users and developers. All
are provided by Intuit Canada or through its partners.
Intuit Canada has employees located in Edmonton, Calgary, Mississauga,
Montreal and Ottawa. Intuit Canada is an affiliate of Intuit Inc., which
is listed on the Nasdaq stock market under the symbol INTU. More
information can be found at www.intuit.ca.
QuickTax is the registered mark of LexisNexis Canada Inc., used by
Intuit Canada under license.
About the survey
From June 7 to June 8, 2010, Angus Reid
Public Opinion conducted an online survey on behalf of Intuit Canada
among British Columbia and Ontario small business owners. The sample is
further defined as: 101 Ontario small business owners with one to 99
employees. The margin of error for a sample of this size is +/-9.8 per
cent, 19 times out of 20. The British Columbia survey included 100 small
business owners with one to 99 employees. The margin of error for a
sample of this size is +/-9.8 per cent, 19 times out of 20.
SOURCE Intuit Canada Limited
For further information: For further information:
T 416.979.0049 x. 346