Once you have turned into a vat registered trader in the UK or perhaps some other country that follows vat then you should maintain complete vat books for hassle 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 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 can still do so before reaching that vat threshold limit. After you have turned into a vat registered trader in the UK then you will need to obey all applicable vat rules framed by HM Revenue and Customs department or hmrc vat department. Although there is no set way of maintaining books of accounts specifically for vat, you still need to ensure 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 these 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 every service or product, and the total vat amount collected against that sales invoice vatnumbers. All this data should also be mentioned in the sales books whilst all purchase invoices will have to be summarized in your 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 extremely important since vat officers at hmrc might compare your vat returns and even your vat refunds and may decide to conduct a vat audit of your business. When this happens, vat officers might call at your business premises and would want to go over all your books of accounts to confirm certain doubts lingering in their minds. They may cross check vat invoices with all your sales books or request certain confirmations on specific vat transactions only to confirm if they were indeed genuine ones. If all your books of accounts related to vat are in order then that would create a favourable impression with those vat officers as well as prevent any penalties from striking down your organization plus your reputation.
If you have any problems to understand what exactly is vat then you certainly go looking for the services of a capable vat agent that can assist you to create and keep all books of accounts associated with vat in a clear and methodical manner site here. You 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 would be able to 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 will help you to conduct your business in a clear and seamless manner. In case you too now utilize vat in the United Kingdom then you’ll definitely have to maintain complete vat books for hassle free accounting and auditing.