Once you have turned into a vat registered trader in the United Kingdom or perhaps some other country that follows vat then you should maintain complete vat books for trouble free accounting. These books of accounts have to record and display each vat transaction in detail, and may be of great help if you are 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 twelve months of your business, although 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. Although there is no set means of maintaining books of accounts especially for vat, you still 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 respective dealings with assorted parties even though they 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 have to display your vat number, vat rate for every product or service, 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 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 choose to conduct a vat audit of your business. When this happens, vat officers might call at your business premises and may want to look at all of your books of accounts to confirm certain doubts lingering in their minds. They might 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 pertaining 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 business plus your reputation.
If you have any problems to understand what exactly is vat then you go looking for the expertise of a good vat agent that can help you to create and keep all books of accounts associated with vat in a clear and methodical manner. 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 on the right format for your business based on your scheme and vat classifications of the services and goods.
Maintaining proper books of accounts can help you to conduct your small business in a clear and seamless manner. In case you too have adopted vat in the United Kingdom then you will definitely have to maintain complete vat books for trouble free accounting and auditing.