Once you have turned into a vat registered trader in the United Kingdom or perhaps some 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 detail, and may be of great help if you’re subjected to 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. Once you have become a vat registered trader in the United Kingdom 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 way of maintaining books of accounts specifically for vat, you still www.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 respective dealings with various parties even though these were conducted in other countries, etc.
These details should also 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 the total vat amount collected against that sales invoice. 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 required 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 call at your business premises and would want to look at all your books of accounts to verify certain doubts lingering in their minds. They might cross check vat invoices with 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 typically in order then that would create a favourable impression with those vat officers as well as 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 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. 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 services and goods.
Maintaining proper books of accounts can help you to conduct your small business in a clear and seamless manner. In case you too have adopted vat in the United Kingdom then you’ll definitely need to maintain complete vat books for hassle free accounting and auditing.