Once you have turned into a vat registered trader in the UK 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 can be of great help if you’re subjected to a vat audit.
In the United Kingdom you’ll have to go 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. Once you have become a vat registered trader in the United Kingdom then you will 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 still need to ensure 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 though they were conducted in other countries, etc.
These records should also be summarized when you file regular vat returns on a yearly, quarterly or monthly basis, as decided by hmrc vat department. Your vat invoice too will specifically have to display your vat number, vat rate for each service or product, and the vat check total vat amount collected against that sales invoice. All this data will also need to be mentioned in your sales books even as all purchase invoices will have to be summarized in the purchase books. Moreover, 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 may choose to conduct a vat audit of your business. When this happens, vat officers might call at your business premises and may want to go over all your books of accounts to confirm 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 related to vat are typically in order then that will make 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 in understanding what exactly is vat then you definitely should go looking for the services 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 need to maintain books of accounts related to vat for a duration of 6 years. Various vat schemes require different kinds of books and your vat agent would be able to assist 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 can help you to conduct your business in a clear and seamless manner. If you too now utilize vat in the UK then you will definitely have to maintain complete vat books for hassle free accounting and auditing.