In case you have shifted over to vat or value added tax system then you need to maintain vat accounting standards for quick entry to VAT records. Although most eu countries including the UK do not have rigid or set standards to keep vat records http://www.vatcheck.com/vat/, you still must make sure that relevant vat figures are easily easily obtainable in case the hmrc vat department asks for them or pays a visit.
In the last decade, a lot more countries including those within the EU have shifted their tax system on goods and services to vat. This system taxes services and goods each time there’s a transaction, thus raising revenues for governments while ensuring minimal tax leaks. If you’re a trader in the UK 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 previous 12 months.
When you become part within the cycle of vat tax chain then you will need to follow certain guidelines imposed by the HM Revenue and Customs department or hmrc department regarding vat accounting. You will be issued a unique vat number which will have to be mentioned in each vat invoice that you’ll now be needed to generate with each sale. Additionally, you will have to display vat rates of each product or service sold to your clients. When you purchase services or goods from vat registered traders then you will also have to see if their invoices too follow the same format as specified by hmrc vat.
In addition, the hmrc will also specify the frequency of filing vat returns so that all vat that’s been collected by you, on your sales can 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 then 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 consistently.
In the United Kingdom, you’ll 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 enterprise. In case you deal in goods or services that attract reduced vat rates, zero vat rates, or are vat exempt then you’ll also need to clearly specify the classification of those services or goods in your records. There are various accounting schemes in vat such as annual accounting scheme, cash accounting scheme, flat rate scheme, retail schemes, and second-hand goods scheme that will need specific methods to maintain your required records.
As soon as you turn into a vat registered trader in the UK then you will need to follow vat rules and regulations which have been specified by the hmrc vat department. These methods are certainly not really hard and by maintaining proper vat accounting standards, it will become very easy for you personally and the hmrc to have access to your vat records.