If you have shifted to vat or value added tax system you’ll need to keep vat accounting standards for easy access to VAT records. Although most eu countries including the UK don’t have rigid or set standards to maintain vat records, you will still need to ensure that relevant vat figures are easily easily obtainable in case the hmrc vat department wants them or pays a visit.
Over the past decade, a lot more countries including those within the European Union have shifted their tax system on services and goods to vat. This system taxes services and goods every time there is a vatverification.com transaction, thus raising revenues for governments while ensuring minimal tax leaks. If you are a trader in the United Kingdom then you certainly may have converted into a vat registered trader once your taxable sales would have hit the vat threshold limit of ?70,000 in the last 12 months.
When you become an integral part within the cycle of vat tax chain you will need to follow certain guidelines imposed by the HM Revenue and Customs department or hmrc department regarding vat accounting. You’ll be issued a distinctive vat number that will have to be mentioned in each vat invoice that you will now be required to generate with each sale. Additionally, you will have to display vat rates of every product or service sold to the clients. Whenever you purchase goods or services from vat registered traders you will also have to check if their invoices too follow the same format as per hmrc vat.
Furthermore, the hmrc will even specify the frequency of filing vat returns so that all vat that’s been collected by you on your sales might be paid to the government. Your vat returns will have to give a summary for vat paid on purchases and vat collected on taxable sales. For those who like to go into for any vat reclaim or vat refund there are separate vat forms that should be filled up and delivered with documentary proof. The hmrc offers several vat online services including online filing of vat returns and this should enable you to speedily complete all vat formalities on a regular basis.
In the United Kingdom, you will also have to maintain up-to-date vat accounting records such as bank accounts, profit and loss accounts, cash books, sales and purchase books, delivery notes, along with books of accounts relevant to your business. If you deal in services or goods that attract reduced vat rates, zero vat rates, or are vat exempt then you will also need to clearly specify the classification of such services or goods in your records. There are many accounting schemes in vat such as annual accounting scheme, cash accounting scheme, flat rate scheme, retail schemes, and second-hand goods scheme that will require specific techniques to maintain your required records.
As soon as you turn into a vat registered trader in the UK then you’ll have to follow vat regulations which have been specified by the hmrc vat department. These methods are not very difficult and by maintaining proper vat accounting standards, it will become easy for you personally as well as the hmrc to have access to your vat records.