Once you have converted into a vat registered trader in the UK or perhaps some other country that follows vat then you should maintain complete vat books for hassle 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 subjected to a vat audit.
In the United Kingdom you will have to go for vat registration upon completing 70,000 sterling pounds of taxable sales in the previous one year of your business, although you can still do so before reaching that vat threshold limit. Once you have turned into 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 https://vatverification.com have to be sure you store all details of vat paid and collected including invoice numbers, dates, vat rates, vat amounts, names and addresses of your dealings with assorted parties even if these were conducted abroad, 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 service or product, and also the total vat amount collected against that sales invoice. All of 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. In addition, maintaining bank and cash books is required 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 decide to conduct a vat audit of your business. When this happens, vat officers might visit your business premises and would want to look at all of your books of accounts to verify certain doubts lingering in their minds. They may cross check vat invoices with all your sales books or request certain confirmations on specific vat transactions simply to confirm if they were indeed genuine ones. If all your books of accounts pertaining to vat are typically 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 in understanding what exactly is vat then you go in for the expertise of a capable vat agent that can help you to create and maintain all books of accounts associated with vat in a clear and methodical manner. You will need to keep your 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 about the right format for your business depending on your scheme and vat classifications of the services and goods.
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 have to maintain complete vat books for trouble free accounting and auditing.