If you have shifted to vat or value added tax system you’ll need to maintain vat accounting standards for easy access to VAT records. Although most eu countries like the UK don’t have rigid or set standards to maintain vat records, you still must make sure that relevant vat figures are easily accessible in case the hmrc vat department asks for them or pays you a visit.
In the last decade, an increasing number of countries including those within the EU have shifted their tax system on services and goods to vat. This method taxes goods and services each time there’s a vatverification.com transaction, thus raising revenues for governments while ensuring minimal tax leaks. If you’re a trader in the United Kingdom then you certainly might have converted into a vat registered trader once your taxable sales might have hit the vat threshold limit of ?70,000 in the previous 1 year.
When you become part within 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 distinctive vat number that will need to be mentioned in each vat invoice that you will be needed to generate with each sale. You will also ought to display vat rates of every products or services sold to the clients. Whenever you purchase goods or services from vat registered traders you will also have to see if their invoices too follow the same format as per hmrc vat.
In addition, the hmrc will also specify the regularity of filing vat returns so that all vat that’s been collected by you, on your sales might be paid to your government. Your vat returns will have to provide a summary for vat paid on purchases and vat collected on taxable sales. In case you want to go in for any vat reclaim or vat refund 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 which should enable you to speedily complete all vat formalities consistently.
In the UK, you’ll have 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’ll also need to clearly specify the classification of those goods or services within your records. There are various accounting schemes in vat like annual accounting scheme, cash accounting scheme, flat rate scheme, retail schemes, and second-hand goods scheme that will need specific techniques to maintain your required records.
Once you turn into a vat registered trader in the UK then you will need to follow vat regulations that have been specified by the hmrc vat department. These methods are certainly not very difficult and also by maintaining proper vat accounting standards, it will become very easy for you and the hmrc to have access to your vat records.