What criteria you need to meet in order to obtain R&D tax credits

What criteria you need to meet in order to obtain R&D tax credits

Gilbert McBride No Comment
Business Tips

Owning a business means you will have a lot of trouble keeping everything in order with taxes and other financial issues. Even though you might consider yourself documented on this topic, you would be amazed to hear that many people forget about the existence of refunds and credit claiming that you can make good use of. Being uninformed about these facts that usually do not get as much attention as other ones means that you will never be aware of the implications they bring to owning a business. For instance, research and development tax credits are one of the many types of credits business holders do not know about. What is paramount to know about R&D tax credits is the conditions your business will have to meet in order to obtain it. Here is a list with these requirements and what they are actually meaning:

Limited company

In order to be able to request R & D tax credits your company must be limited. What does that mean? Well, a limited company is private and it represents its own entity that will have one or more than one shareholders who obtain their position via private sales. The main benefit of private limited companies is that they are producing goods with smaller production costs and receive great profits. In addition to that, any limited company business holder may apply for the aforementioned R & D credit.

UK registration

Setting up a private limited company is not complicated at all. You can actually do it online on the official government website, where you will need to fill up some forms and follow a list of steps. Among these steps you will be finding each and every measure you need to take as a new business in a certain industry from setting your private limited company up to registering for a corporation tax. As a new business owner you will need to provide the name of your company, its address, the name of the actual director/directors, additional details about your company’s shareholders, the SIC code etc. The registration can be done online for a small amount of money via a credit card or PayPal account. The registration will take place in less than 24 hours, so the whole process is not as complicated as you may have thought.

GAAP accounts

The Generally Accepted Accounting Principles, also known as GAAP, is a set of financial standards. Companies that are looking for obtaining tax credits or any other kind of loan should consider informing about these accounts. Any company that owns such an account will be granted with much more credibility, given the fact that GAAP criteria are standard and quite strict. The main reason why any private limited company should take into account GAAP accounts is the assurance they are offering for eventual further action in the financial sector. These accounts will cover any balance sheet, income data, financial note or disclosure a business may need, summing up the financial status of a company.

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