Once you have converted into a vat registered trader in the UK or perhaps some 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 are 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 twelve months 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 UK 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 way of maintaining books of accounts especially for vat, you still 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 dealings with assorted parties even though they were conducted abroad, etc.
These records will also need to be summarized when 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 service or product, and the total vat amount collected against that sales invoice https://vatnumbers.com. All this data should also be mentioned in the sales books whilst all purchase invoices will have 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 and even your vat refunds and may decide to conduct a vat audit of your business. In such a case, vat officers might visit your business premises and would 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 request certain confirmations on specific vat transactions only to confirm if they were indeed genuine ones. If all of your books of accounts related to vat are typically in order then that would make a favourable impression with those vat officers as well as prevent any penalties from striking down your organization as well as your reputation.
In case you have any problems to understand what exactly is vat then you certainly go in for the expertise of a good vat agent that can help you to create and maintain all books of accounts related to vat in a clear and methodical manner get more information. You will need to keep your books of accounts related to vat for a duration of 6 years. Various vat schemes require different types 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 small business in a clear and seamless manner. In case you too have adopted vat in the UK then you will definitely have to maintain complete vat books for hassle free accounting and auditing.