Once you have turned into a vat registered trader in the UK 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 greater detail, and may be of great help if you’re put through a vat audit.
In the United Kingdom you will have to opt for vat registration upon completing 70,000 sterling pounds of taxable sales in the previous one year of your business, although you can still do this before reaching that vat threshold limit. After you have turned into a vat registered trader in the UK then you will 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 especially for vat, you will still 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 assorted parties even if they were conducted in other countries, etc.
These records will also need to 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 each service or product, and also the total vat amount collected against that sales invoice vat numbers. All this data will also need to be mentioned in your sales books whilst all purchase invoices will have 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 and even your vat refunds and might decide to conduct a vat audit of your business. In such a case, 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 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 typically in order then that would create a favourable impression with those vat officers as well as prevent any penalties from striking down your business plus your reputation.
In case you have any problems in understanding what exactly is vat then you definitely should go looking for the expertise 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 important source. You will need to keep your books of accounts related to vat for a period of 6 years. Various vat schemes require different kinds of books and your vat agent would be able to assist you on the right format for your business based on your scheme and vat classifications of the services and goods.
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’ll definitely need to maintain complete vat books for trouble free accounting and auditing.