After you have turned into a vat registered trader in the United Kingdom or perhaps any 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 detail, and can be of great help if you’re subjected to a vat audit.
In the United Kingdom you’ll have to go for vat registration upon completing 70,000 sterling pounds of taxable sales in the previous one year 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’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 specifically for vat, you will still need to ensure 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 these 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 http://vatnumbers.com. All of this data will also need to be mentioned in the sales books even as all purchase invoices will need to be summarized in the 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 would want to look at all of 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 simply 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 as well as your reputation.
If you have any problems in understanding what exactly is vat then you go in for the services 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 useful site. You 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 could guide you on the right format for your business based on your scheme and vat classifications of the goods and services.
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.