After you have turned 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 detail, and may be of great help if you’re subjected to a vat audit.
In the UK 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 can still do this before reaching that vat threshold limit. Once 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. While there is no set way of maintaining books of accounts especially for vat, you will still have to be sure 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 have to display your vat number, vat rate for every service or product, and the total vat amount collected against that sales invoice www.vatnumbers.com. All of this data should also be mentioned in your sales books whilst all purchase invoices will need to be summarized in your purchase books. Moreover, 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 or even your vat refunds and might choose to conduct a vat audit of your business. When this happens, vat officers might call at your business premises and would want to look at all of your books of accounts to verify certain doubts lingering in their minds. They may cross check vat invoices with your sales books or request certain confirmations on specific vat transactions simply to confirm if they were indeed genuine ones. If all of your books of accounts pertaining to vat are typically in order then that would create a favourable impression with those vat officers and also prevent any penalties from striking down your business plus your reputation.
If you have any problems to understand what exactly is vat then you definitely should go looking for the services of a capable vat agent that can assist you to create and keep all books of accounts associated with vat in a clear and methodical manner next page. You will need to maintain books of accounts connected with 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 United Kingdom then you’ll definitely need to maintain complete vat books for trouble free accounting and auditing.