After you have converted into a vat registered trader in the United Kingdom or perhaps any other country that follows vat you then 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 may be of great help if you’re put through a vat audit.
In the UK you will have to opt for vat registration upon completing 70,000 sterling pounds of taxable sales in the previous twelve months of your business, although you can still do so before reaching that vat threshold limit. After you have turned into a vat registered trader in the United Kingdom then you’ll have 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 still https://vatverification.com have to be sure that 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 they were conducted in other countries, etc.
These details 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 have to display your vat number, vat rate for every product or service, and also the total vat amount collected against that sales invoice. All of this data will also need to be mentioned in the sales books whilst all purchase invoices will have to be summarized in your 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 may choose to conduct a vat audit of your business. When this happens, vat officers might visit your business premises and would want to go over all your books of accounts to confirm certain doubts lingering in their minds. They may cross check vat invoices with 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 in order then that would create 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 go in for the services of a good vat agent that can help you to create and maintain all books of accounts associated with vat in a clear and methodical manner. You need to maintain books of accounts connected with vat for a duration of 6 years. Various vat schemes require different types of books and your vat agent would be able to assist you about the right format for your business based on your scheme and vat classifications of the goods and services.
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 have to maintain complete vat books for hassle free accounting and auditing.