Maintain vat accounting standards for convenient access to vat records

If you have shifted over to vat or value added tax system you’ll need to keep vat accounting standards for quick access to VAT records. Although most eu countries including the UK don’t have rigid or set standards to maintain vat records, you will still must make sure that all relevant vat figures can be easily obtainable in case the hmrc vat department asks for them or pays a visit.

In the last decade, an increasing number of countries including those from the EU have shifted their tax system on goods and services to vat. This system taxes services and goods every 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 might have turned into a vat registered trader once your taxable sales might have hit the vat threshold limit of ?70,000 in the previous 1 year.

Once you become an integral part in the cycle of vat tax chain then you will have 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 that will need to be mentioned in each vat invoice that you’ll now be required to generate with each sale. Additionally, you will ought to display vat rates of every products or services sold to your clients. When you purchase services or goods from vat registered traders then you will also need to see if their invoices too stick to the same format as per hmrc vat.

In addition, the hmrc will even specify the frequency of filing vat returns to ensure that all vat that has been collected by you on your sales can be paid to your 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 in for any vat reclaim or vat refund then there are separate vat forms that need to be filled up and delivered with documentary proof. The hmrc offers several vat online services including online filing of vat returns which should enable you to speedily complete all vat formalities on a regular basis.

In the United Kingdom, you will also need to maintain up-to-date vat accounting records including banking accounts, profit and loss accounts, cash books, sales and purchase books, delivery notes, along with books of accounts relevant to your business. In case you deal in goods or services that attract reduced vat rates, zero vat rates, or are vat exempt then you will also need to clearly specify the classification of those services or goods in your records. There are many 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 are a vat registered trader in the United Kingdom then you’ll need to follow vat regulations that have been specified by the hmrc vat department. These methods are certainly not very difficult and by maintaining proper vat accounting standards, it will become very easy for you personally as well as the hmrc to get access to your vat records.