Once you have turned into a vat registered trader in the UK 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 may be of great help if you’re put through a vat audit.
In the UK you will have to go for vat registration upon completing 70,000 sterling pounds of taxable sales in the last one year of your business, although you could do this before reaching that vat threshold limit. Once you have become a vat registered trader in the United Kingdom 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 specifically for vat, you still vatverification have to be sure 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 records 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 every service or product, and also the total vat amount collected against that sales invoice. All this data will also need to be mentioned in the sales books whilst all purchase invoices will have 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 very important since vat officers at hmrc might compare your vat returns and even your vat refunds and may 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 confirm certain doubts lingering in their minds. They may 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 of your books of accounts pertaining to vat are typically in order then that would create a favourable impression with those vat officers and also prevent any penalties from striking down your organization plus your reputation.
In case you have any problems to understand what is vat then you certainly go looking for the services 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. You will need to maintain books of accounts connected with vat for a period of 6 years. Various vat schemes require different kinds of books and your vat agent could 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 business in a clear and seamless manner. If you too have adopted vat in the United Kingdom then you will definitely need to maintain complete vat books for trouble free accounting and auditing.