Once you have turned into a vat registered trader in the United Kingdom or perhaps any other country that follows vat then you should maintain complete vat books for trouble free accounting. These books of accounts need to record and display each vat transaction in greater detail, and can be of great help if you’re subjected to a vat audit.
In the UK you’ll have to go for vat registration upon completing 70,000 sterling pounds of taxable sales in the previous one year of your business, although you could do this before reaching that vat threshold limit. Once you have turned into a vat registered trader in the United Kingdom then you will need 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 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 these were conducted in other countries, etc.
These details 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 need 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 of this data will also need to be mentioned in the sales books even as all purchase invoices will have to be summarized in your purchase books. Moreover, maintaining bank and cash books is required 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 may choose to conduct a vat audit of your business. In such a case, vat officers might call at 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 ask for certain confirmations on specific vat transactions simply to confirm if they were indeed genuine ones. If all of your books of accounts related to vat are typically in order then that will create a favourable impression with those vat officers and also prevent any penalties from striking down your business plus your reputation.
If you have any problems to understand what is vat then you go looking for the expertise of a capable vat agent that can help you to create and keep all books of accounts related to vat in a clear and methodical manner source. You need to maintain books of accounts connected with vat for a duration of 6 years. Various vat schemes require different kinds of books and your vat agent would be able to guide you on the right format for your business based on your scheme and vat classifications of the goods and services.
Maintaining proper books of accounts will help you to conduct your business in a clear and seamless manner. In case you too have adopted vat in the UK then you’ll definitely need to maintain complete vat books for hassle free accounting and auditing.