Monthly tax tip:
Superannuation contributions to employees are a usual deduction, however they are only claimed on a cash basis. This means that the amount that will be claimed as a deduction will be the amount that your business physically paid throughout the financial year – even if your accounting is on an accruals basis. If you accrue superannuation during April to June but do not pay it until July then you will be unable to claim the deduction in your 2020 tax return. You will however be able to claim it in your 2021 tax return. So either way, you will be able to claim the deduction but you will need to decide if you will claim it this financial year or the next. We recommend having a tax planning service completed so you have an estimate of how much income tax your business will be paying, then you can decide which financial year to pay and claim the contributions in. If your business won’t be paying any income tax this financial year then it is probably the best choice to pay and claim the contributions in the next financial year. If you do decide to claim the contributions in your 2020 tax return then please ensure that the contributions are processed and paid by 30 June 2020.
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