After you have turned 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 hassle free accounting. These books of accounts need 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 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 this 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. Although there is no set way of maintaining books of accounts specifically for vat, you will still vatverification need to ensure 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 assorted parties even though these 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 need to display your vat number, vat rate for each service or product, and also the total vat amount collected against that sales invoice. All this data should also be mentioned in the sales books whilst all purchase invoices will need to be summarized in the purchase books. In addition, 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 or 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 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 only to confirm if they were indeed genuine ones. If all your books of accounts pertaining to vat are typically in order then that would make a favourable impression with those vat officers and also prevent any penalties from striking down your organization as well as your reputation.
If you have any problems to understand what exactly is vat then you definitely should go in for the services of a good vat agent that can assist you to create and maintain all books of accounts related to vat in a clear and methodical manner. 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 on the right format for your business depending on your scheme and vat classifications of your services and goods.
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’ll definitely need to maintain complete vat books for trouble free accounting and auditing.