After you have converted into a vat registered trader in the United Kingdom or even in any other country that follows vat you then should maintain complete vat books for trouble free accounting Vat Verification. These books of accounts have to record and display each vat transaction in greater detail, and may be of great help if you are subjected to a vat audit.
In the United Kingdom you’ll have to opt for vat registration upon completing 70,000 sterling pounds of taxable sales in the previous one year of your business, even though you could do so before reaching that vat threshold limit. Once you have become 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 especially for vat, you will still have to be sure 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 assorted parties even though they were conducted abroad, etc.
These details should also be summarized whenever you file regular vat returns on the yearly, quarterly or monthly basis, as decided by hmrc vat department. Your vat invoice too will specifically have to display your vat number, vat rate for each service or product, and the total vat amount collected against that sales invoice. All of this data should also be mentioned in the sales books even as all purchase invoices will need to be summarized in the purchase books. In addition, 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 and even your vat refunds and might decide to conduct a vat audit of your business. When this happens, vat officers might visit your business premises and would want to go over all of your books of accounts to verify certain doubts lingering in their minds. They might cross check vat invoices with 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 related to vat are in order then that would create a favourable impression with those vat officers and also prevent any penalties from striking down your organization plus your reputation.
If you have any problems in understanding what exactly is vat then you go looking for the expertise of a capable vat agent that can help you to create and keep all books of accounts related to vat in a clear and methodical manner check my blog. You will need to keep your books of accounts related to vat for a duration of 6 years. Various vat schemes require different types of books and your vat agent could guide you on the right format for your business depending on your scheme and vat classifications of the services and goods.
Maintaining proper books of accounts can help you to conduct your business in a clear and seamless manner. If you too now utilize vat in the United Kingdom then you will definitely need to maintain complete vat books for trouble free accounting and auditing.