After you have turned 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 hassle free accounting www.vatverification.com. These books of accounts have to record and display each vat transaction in detail, and can be of great help if you are put through a vat audit.
In the United Kingdom you will have to go for vat registration upon completing 70,000 sterling pounds of taxable sales in the last one year of your business, although you could do so before reaching that vat threshold limit. Once 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 dealings with various parties even if these were conducted in other countries, etc.
These records 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 need to display your vat number, vat rate for each product or service, and the total vat amount collected against that sales invoice. All of this data should also be mentioned in your sales books whilst all purchase invoices will need to be summarized in your purchase books. Moreover, 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 might decide to conduct a vat audit of your business. When this happens, vat officers might call at your business premises and would want to look at all of 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 of your books of accounts pertaining to vat are in order then that will make a favourable impression with those vat officers and also prevent any penalties from striking down your business as well as your reputation.
In case you have any problems in understanding what exactly is vat then you definitely go looking for the services of a capable vat agent that can assist you to create and maintain all books of accounts associated with vat in a clear and methodical manner reference. You need to keep your books of accounts related to vat for a period of 6 years. Various vat schemes require different kinds 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 have adopted vat in the UK then you will definitely have to maintain complete vat books for hassle free accounting and auditing.