If you have shifted to vat or value added tax system then you need to keep vat accounting standards for quick access to VAT records. Although most eu countries like the UK do not have rigid or set standards to keep vat records, you still must make sure that all relevant vat figures can be accessible in case the hmrc vat department asks for them or pays you a visit.
In the last decade, a lot more countries including those from the European Union have shifted their tax system on services and goods to vat. This system taxes services and goods every time there is a http://vatverification.com transaction, thus raising revenues for governments while ensuring minimal tax leaks. If you’re a trader in the United Kingdom then you might have converted into a vat registered trader once your taxable sales might have hit the vat threshold limit of ?70,000 in the previous 12 months.
Once you become an integral part within the cycle of vat tax chain then you will have to follow certain guidelines imposed by the HM Revenue and Customs department or hmrc department regarding vat accounting. You’ll be issued a distinctive vat number which will need to be mentioned in each vat invoice that you’ll now be needed to generate with each sale. Additionally, you will have to display vat rates of every product or service sold to the clients. When you purchase services or goods from vat registered traders you will also need to check if their invoices too stick to the same format as specified by hmrc vat.
In addition, the hmrc will also specify the frequency of filing vat returns so that all vat that has been collected by you, on your sales can be paid to your government. Your vat returns will have to provide a summary for vat paid on purchases and vat collected on taxable sales. In case you want to go into for any vat reclaim or vat refund then there are separate vat forms that should be filled up and delivered with documentary proof. The hmrc offers several vat online services including online filing of vat returns which should enable you to speedily complete all vat formalities consistently.
In the United Kingdom, you’ll need to maintain up-to-date vat accounting records such as banking accounts, profit and loss accounts, cash books, sales and purchase books, delivery notes, and other books of accounts relevant to your enterprise. If you deal in goods or services that attract reduced vat rates, zero vat rates, or are vat exempt then you’ll also have to clearly specify the classification of such goods or services within your records. There are various accounting schemes in vat such as annual accounting scheme, cash accounting scheme, flat rate scheme, retail schemes, and second-hand goods scheme that will require specific methods to maintain your required records.
Once you are a vat registered trader in the UK then you’ll need to follow vat rules and regulations that have been specified by the hmrc vat department. These techniques are not really hard and by maintaining proper vat accounting standards, it will become very easy for you personally as well as the hmrc to get access to your vat records.