Once 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 Vatverification.com. These books of accounts have to record and display each vat transaction in greater detail, and can be of great help if you are 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 last twelve months of your business, even though you can still do this before reaching that vat threshold limit. After you have become a vat registered trader in the UK then you’ll have to obey all applicable vat rules framed by HM Revenue and Customs department or hmrc vat department. While there is no set means of maintaining books of accounts especially for vat, you 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 if these were conducted abroad, etc.
These records will also need to be summarized whenever 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 each service or product, and also the total vat amount collected against that sales invoice. All this data should also be mentioned in the sales books even as all purchase invoices will need 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 extremely 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. When this happens, vat officers might visit your business premises and may want to go over all your books of accounts to confirm certain doubts lingering in their minds. They might cross check vat invoices with all your sales books or ask for 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 will create 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 exactly is vat then you should go in for the services of a good vat agent that can assist you to create and maintain all books of accounts related to vat in a clear and methodical manner more hints. You will need to keep your books of accounts related to vat for a period 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 depending on your scheme and vat classifications of your services and goods.
Maintaining proper books of accounts will help you to conduct your small business in a clear and seamless manner. If you too now utilize vat in the United Kingdom then you will definitely have to maintain complete vat books for trouble free accounting and auditing.