After you have turned into a vat registered trader in the United Kingdom or even in any 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’re subjected to a vat audit.
In the UK you’ll have to go for vat registration upon completing 70,000 sterling pounds of taxable sales in the last twelve months of your business, even though you could do so before reaching that vat threshold limit. After you have become 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 means of maintaining books of accounts specifically for vat, you 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 various parties even though they were conducted in other countries, etc.
These records 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 need to display your vat number, vat rate for each product or service, and the total vat amount collected against that sales invoice vatnumbers.com. All of this data should also be mentioned in the sales books whilst all purchase invoices will have 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 or even your vat refunds and might decide to conduct a vat audit of your business. In such a case, vat officers might call at your business premises and may want to go over all of your books of accounts to verify certain doubts lingering in their minds. They may cross check vat invoices with 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 related to vat are in order then that will create a favourable impression with those vat officers as well as prevent any penalties from striking down your business 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 capable vat agent that can assist you to create and maintain all books of accounts related to vat in a clear and methodical manner helpful resources. You will need to maintain books of accounts connected with vat for a period 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 based on your scheme and vat classifications of the goods and services.
Maintaining proper books of accounts can help you to conduct your small business in a clear and seamless manner. If you too have adopted vat in the UK then you’ll definitely have to maintain complete vat books for trouble free accounting and auditing.