HMRC have published their latest statistics on the Research and Development claims made by companies on CT600's received on or before the 30th June 2015 - and there is lots of good news!!The number of claims made under the SME R&D scheme ,for financial year 2013/14 is up 23% from financial year 2012/13 and comes in at a total of 16,160 claims for the year.  Research and Development credits can come in the form of an enhanced deduction, and therefore a reduction in the corporation tax liability, or they can be a repayable credit should the company be in a loss-making position.  

In the regional analysis of the claims made under the SME scheme the South West accounts for nearly 8% of the claims, compared to 19% of the claims in the South East. This equates to £55million in tax relief being claimed by South West companies!!  So, although our figures are large, it would be good to increase these if we can.

In the industry sector analysis, manufacturing still leads the way accounting for 30% of all of the claims made, but it is now followed very closely, with 27% of all claims, by the information and communication sector.  This is particularly pertinent as it shows that R&D is not only for your "traditional" factory environment-type work, or white-coats discovering new potions, it has firmly moved into the everyday office environment.

All businesses should therefore assess whether they believe that they may be undertaking projects or work which is moving technology or science forwards - the tax reliefs are very generous and well worth a second look!   Please add a line - "Discuss R&D" - to your next management meeting agenda!

As we are all starting to get to grips with the new rules that will apply to all dividends paid on or after the 6th April 2016, it is important to realise that the significant number of small owner-managed companies are going to have to change how they extract funds from their companies.  Continuing as most are doing now - that is, taking a small salary to preserve your entitlement to State Pension, and the balance as dividends - will, in most cases mean that more tax will be payable. 
The rates of tax are as follows:
Basic rate tax payer - currently pays 0% tax on dividends - this will increase to 7.5%
Higher rate tax payer - currently pays 25% tax on dividends - this will increase to  32.5%
Additional rate tax payer - currently pays 30.55% tax on dividends - increasing to  38.1%

It is also important to remember that the £5,000 tax-free allowance for dividends will form part of your personal allowance, and is not in addition to your personal allowance!  HMRC have provided some examples here.

Other people who are likely to face the brunt of these new rules are those whose income is made up of a significant proportion of dividend income.  They too will need to understand the new rates of tax and how this is to affect their tax bills.