After you have converted 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 Vatverification.com. These books of accounts need to record and display each vat transaction in greater detail, and can be of great help if you’re subjected to a vat audit.
In the United Kingdom you’ll 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 become a vat registered trader in the UK 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 especially for vat, you still 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 if these were conducted in other countries, etc.
These details should also be summarized when 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 every product or service, and the total vat amount collected against that sales invoice. All this data will also need to be mentioned in the sales books whilst all purchase invoices will have to be summarized in the 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 very important since vat officers at hmrc might compare your vat returns and 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 go over 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 ask for 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 will create 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 to understand what exactly is vat then you go in for the expertise of a good vat agent that can help you to create and maintain all books of accounts associated with vat in a clear and methodical manner read this. You need to maintain books of accounts connected with vat for a duration 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 depending on your scheme and vat classifications of your goods and services.
Maintaining proper books of accounts will help you to conduct your small business in a clear and seamless manner. If you too now utilize vat in the United Kingdom then you will definitely need to maintain complete vat books for trouble free accounting and auditing.