Once you have converted into a vat registered trader in the United Kingdom or even in some other country that follows vat you then 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’re 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 last one year of your business, even though you could do this before reaching that vat threshold limit. After you have become a vat registered trader in the UK then you’ll need to obey all applicable vat rules framed by HM Revenue and Customs department or hmrc vat department. Although there is no set means of maintaining books of accounts specifically for vat, you will still have to be sure you store all specifics of vat paid and collected including invoice numbers, dates, vat rates, vat amounts, names and addresses of your dealings with various parties even if 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 have to display your vat number, vat rate for each service or product, and also the total vat amount collected against that sales invoice vatnumbers.com. All this data should also be mentioned in your sales books whilst all purchase invoices will have 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 very 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. In such a case, vat officers might visit your business premises and may want to look at all 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 only to confirm if they were indeed genuine ones. If all your books of accounts related to vat are in order then that will make a favourable impression with those vat officers and also prevent any penalties from striking down your organization as well as your reputation.
In case you have any problems to understand what is vat then you definitely 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 find more. You need to keep your books of accounts connected with vat for a duration of 6 years. Various vat schemes require different types of books and your vat agent could assist you about the right format for your business based on your scheme and vat classifications of the services and goods.
Maintaining proper books of accounts will help you to conduct your business in a clear and seamless manner. If you too now utilize vat in the United Kingdom then you’ll definitely need to maintain complete vat books for trouble free accounting and auditing.