After you have turned into a vat registered trader in the UK or even in some other country that follows vat you then 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 are subjected to a vat audit.
In the United Kingdom you’ll have to opt for vat registration upon completing 70,000 sterling pounds of taxable sales in the previous twelve months of your business, although you can still do this before reaching that vat threshold limit. Once you have turned into a vat registered trader in the UK 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 means of maintaining books of accounts especially for vat, you still have to be sure that you store all details of vat paid and collected including invoice numbers, dates, vat rates, vat amounts, names and addresses of your dealings with various parties even if these were conducted in other countries, etc.
These records 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 every product or service, and the total vat amount collected against that sales invoice www.vatnumbers.com. All this data should also be mentioned in your sales books whilst all purchase invoices will need to be summarized in your 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 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 may want to look at all of your books of accounts to verify 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 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.
If you have any problems to understand what is vat then you go looking for the services of a capable vat agent that can help you to create and maintain all books of accounts associated with vat in a clear and methodical manner get the facts. You 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 would be able to guide 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. In case you too now utilize vat in the United Kingdom then you’ll definitely need to maintain complete vat books for hassle free accounting and auditing.