Once you have converted into a vat registered trader in the UK or even in any other country that follows vat you then should maintain complete vat books for hassle free accounting. These books of accounts need to record and display each vat transaction in detail, and may be of great help if you’re put through 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 last twelve months of your business, even though you could do so before reaching that vat threshold limit. Once you have become a vat registered trader in the United Kingdom then you will have to obey all applicable vat rules framed by HM Revenue and Customs department or hmrc vat department. Although there is no set way of maintaining books of accounts specifically for vat, you will still https://vatverification.com 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 though they were conducted in other countries, etc.
These records will also need to be summarized whenever you file regular vat returns on a 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 product or service, and the total vat amount collected against that sales invoice. All this data will also need to be mentioned in your sales books whilst all purchase invoices will need to be summarized in the 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 or even your vat refunds and might 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 look at all your books of accounts to verify certain doubts lingering in their minds. They might 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 will make a favourable impression with those vat officers as well as prevent any penalties from striking down your business plus your reputation.
If you have any problems to understand what exactly is vat then you certainly go in for the expertise of a capable vat agent that can help you to create and maintain all books of accounts related to vat in a clear and methodical manner. You need to keep your books of accounts related to 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 about the right format for your business depending on your scheme and vat classifications of the services and goods.
Maintaining proper books of accounts will help you to conduct your small business in a clear and seamless manner. If you too now utilize vat in the UK then you will definitely have to maintain complete vat books for trouble free accounting and auditing.