Once you have converted into a vat registered trader in the UK or even in any other country that follows vat then you 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 twelve months of your business, even though you can still do this before reaching that vat threshold limit. After you have turned into 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. Although there is no set means of maintaining books of accounts specifically for vat, you will still need to ensure that you store all details of vat paid and collected including invoice numbers, dates, vat rates, vat amounts, names and addresses of your respective dealings with various parties even though these were conducted abroad, etc.
These records 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 each product or service, and also the www.vatcheck.com total vat amount collected against that sales invoice. All this data should also be mentioned in the sales books whilst all purchase invoices will have to be summarized in your 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 decide 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 of your books of accounts to verify certain doubts lingering in their minds. They might 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 in order then that would make a favourable impression with those vat officers and also prevent any penalties from striking down your organization plus your reputation.
In case you have any problems in understanding what is vat then you certainly go in for the services of a good vat agent that can assist you to create and keep all books of accounts related to 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 guide you on the right format for your business depending on your scheme and vat classifications of the goods and services.
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 UK then you will definitely need to maintain complete vat books for hassle free accounting and auditing.