In case you have shifted to vat or value added tax system you’ll need to keep vat accounting standards for quick entry to VAT records. Although most eu countries including the UK do not have rigid or set standards to maintain vat records, you will still need to ensure that relevant vat figures are easily easily obtainable 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 EU have shifted their tax system on goods and services to vat. This method taxes goods and services every time there is a vatverification.com transaction, thus raising revenues for governments while ensuring minimal tax leaks. If you are a trader in the United Kingdom then you certainly may have converted into a vat registered trader as soon as your taxable sales might have hit the vat threshold limit of ?70,000 in the last 12 months.
Once you become part within the cycle of vat tax chain then you will need to follow certain guidelines imposed by the HM Revenue and Customs department or hmrc department regarding vat accounting. You will be issued a distinctive vat number which will have to be mentioned in each vat invoice that you’ll now be required to generate with each sale. Additionally, you will have to display vat rates of each product or service sold to your clients. When you purchase services or goods from vat registered traders then you will also need to see if their invoices too stick to the same format as per hmrc vat.
Furthermore, the hmrc will even specify the frequency of filing vat returns so that all vat that has been collected by you, on your sales might be paid to the government. Your vat returns will need to give 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 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 and this should help 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 bank accounts, profit and loss accounts, cash books, sales and purchase books, delivery notes, along with books of accounts relevant to your enterprise. If you deal in services or goods that attract reduced vat rates, zero vat rates, or are vat exempt then you’ll also need to clearly specify the classification of those services or goods in your records. There are many accounting schemes in vat like annual accounting scheme, cash accounting scheme, flat rate scheme, retail schemes, and second-hand goods scheme that will need specific methods to maintain your required records.
As soon as you are a vat registered trader in the UK then you’ll need to follow vat regulations which have been specified by the hmrc vat department. These methods are certainly not really hard and by maintaining proper vat accounting standards, it will become easy for you personally as well as the hmrc to get access to your vat records.