Once you have converted into a vat registered trader in the UK or even in any other country that follows vat you then should maintain complete vat books for trouble free accounting. These books of accounts need to record and display each vat transaction in detail, and may be of great help if you’re put through a vat audit.
In the United Kingdom you’ll have to go for vat registration upon completing 70,000 sterling pounds of taxable sales in the previous twelve months of your business, even though you could do this before reaching that vat threshold limit. After you have turned into a vat registered trader in the UK then you’ll have to obey all applicable vat rules framed by HM Revenue and Customs department or hmrc vat department. While there is no set way of maintaining books of accounts specifically for vat, you will still need to ensure that you store all details of vat paid and collected including invoice numbers, dates, vat rates, vat amounts, names and addresses of your respective dealings with various parties even if they were conducted in other countries, etc.
These details should also be summarized when you file regular vat returns on a yearly, quarterly or monthly basis, as decided by hmrc vat department. Your vat invoice too will specifically need to display your vat number, vat rate for every product or service, and the total vat amount collected against that sales invoice vatnumbers.com. All of this data will also need to be mentioned in your sales books even as all purchase invoices will have to be summarized in the purchase books. Moreover, maintaining bank and cash books is required for vat registered traders.
Maintaining such vat books on an up-to-date basis is very important since vat officers at hmrc might compare your vat returns or even your vat refunds and may choose to conduct a vat audit of your business. In such a case, vat officers might call at your business premises and may want to look at all your books of accounts to verify certain doubts lingering in their minds. They may cross check vat invoices with all your sales books or ask for certain confirmations on specific vat transactions only to confirm if they were indeed genuine ones. If all of your books of accounts pertaining to vat are typically in order then that will create a favourable impression with those vat officers and also prevent any penalties from striking down your business as well as your reputation.
If you have any problems in understanding what exactly is vat then you definitely go in for the services of a good vat agent that can assist you to create and keep all books of accounts related to vat in a clear and methodical manner read more. You will need to maintain books of accounts connected with vat for a period of 6 years. Various vat schemes require different types of books and your vat agent would be able to assist you about the right format for your business depending on your scheme and vat classifications of the goods and services.
Maintaining proper books of accounts will help you to conduct your business in a clear and seamless manner. If you too now utilize vat in the UK then you’ll definitely have to maintain complete vat books for hassle free accounting and auditing.