After you have converted into a vat registered trader in the United Kingdom or perhaps any other country that follows vat you then should maintain complete vat books for trouble free accounting. These books of accounts have to record and display each vat transaction in greater detail, and may be of great help if you are put through 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 previous twelve months of your business, although you could do this before reaching that vat threshold limit. Once you have become a vat registered trader in the United Kingdom then you’ll need 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 specifically for vat, you will still have to be sure that 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 various parties even though these were conducted abroad, 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 also the total vat amount collected against that sales invoice vatnumbers. All of this data will also need to be mentioned in your 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 and 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 would want to go over all of your books of accounts to verify certain doubts lingering in their minds. They might 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 your books of accounts related to vat are typically in order then that will create a favourable impression with those vat officers as well as prevent any penalties from striking down your organization plus your reputation.
If you have any problems in understanding what is vat then you should go in for the services of a good vat agent that can assist you to create and keep all books of accounts associated with vat in a clear and methodical manner click for source . You will need to maintain 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 based 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 have adopted vat in the UK then you’ll definitely need to maintain complete vat books for hassle free accounting and auditing.