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 UK you will 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 this before reaching that vat threshold limit. After you have turned into a vat registered trader in the United Kingdom then you will 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 still http://vatverification.com need to ensure you store all specifics of vat paid and collected including invoice numbers, dates, vat rates, vat amounts, names and addresses of your dealings with various parties even though they were conducted abroad, etc.
These details should also be summarized whenever you file regular vat returns on a 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 also the total vat amount collected against that sales invoice. All 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 mandatory for vat registered traders.
Maintaining such vat books on an up-to-date basis is extremely 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 would want to look at all 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 simply to confirm if they were indeed genuine ones. If all of your books of accounts pertaining to vat are in order then that would make a favourable impression with those vat officers as well as prevent any penalties from striking down your organization as well as your reputation.
If you have any problems to understand what is vat then you definitely should go in for the services of a good vat agent that can assist you to create and maintain all books of accounts related to vat in a clear and methodical manner. You need to keep your books of accounts connected with vat for a duration of 6 years. Various vat schemes require different types of books and your vat agent could guide you about 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. In case you too have adopted vat in the UK then you will definitely have to maintain complete vat books for trouble free accounting and auditing.