After you have turned into a vat registered trader in the UK or perhaps any other country that follows vat you then should maintain complete vat books for hassle free accounting Vat Verification. 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 UK you’ll have to opt for vat registration upon completing 70,000 sterling pounds of taxable sales in the last one year 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 UK then you will need 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 especially for vat, you will still need to ensure 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 abroad, etc.
These details 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 have to display your vat number, vat rate for every service or product, and also the total vat amount collected against that sales invoice. All this data should also be mentioned in your sales books whilst all purchase invoices will need to be summarized in your purchase books. In addition, maintaining bank and cash books is mandatory 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 or even your vat refunds and might decide to conduct a vat audit of your business. When this happens, vat officers might visit your business premises and would want to look at all your books of accounts to confirm certain doubts lingering in their minds. They may cross check vat invoices with your sales books or ask for 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 in order then that will 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 should go in for the expertise of a capable vat agent that can help you to create and keep all books of accounts related to vat in a clear and methodical manner discover more. 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 assist you about the right format for your business depending on your scheme and vat classifications of your services and goods.
Maintaining proper books of accounts can help you to conduct your small business in a clear and seamless manner. If you too have adopted vat in the United Kingdom then you’ll definitely need to maintain complete vat books for trouble free accounting and auditing.