In case 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 like the UK do not have rigid or set standards to maintain vat records Http://www.vatcheck.com/vat/, you will still must make sure that relevant vat figures can be easily obtainable in case the hmrc vat department wants them or pays you a visit.
Over the past decade, a lot more countries including those from the EU have shifted their tax system on goods and services to vat. This method taxes goods and services each time there’s a transaction, thus raising revenues for governments while ensuring minimal tax leaks. If you are a trader in the United Kingdom then you certainly might have converted into a vat registered trader as soon as your taxable sales would have hit the vat threshold limit of ?70,000 in the last 1 year.
Once you become an integral part within the cycle of vat tax chain you will need to follow certain guidelines imposed by the HM Revenue and Customs department or hmrc department regarding vat accounting. You’ll be issued a unique vat number which will need to be mentioned in each vat invoice that you will be required to generate with each sale. You will also have to display vat rates of every product or service sold to the clients. Whenever you purchase goods or services from vat registered traders then you will also have to check if their invoices too follow the same format as per hmrc vat.
Furthermore, the hmrc will also specify the frequency of filing vat returns so that all vat that’s been collected by you, on your sales can be paid to your government. Your vat returns will need to provide a summary for vat paid on purchases and vat collected on taxable sales. In case you want to go in for a vat reclaim or vat refund 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 UK, you will also have to maintain up-to-date vat accounting records including banking accounts, profit and loss accounts, cash books, sales and purchase books, delivery notes, and other books of accounts relevant to your business. If you deal in services or goods that attract reduced vat rates, zero vat rates, or are vat exempt then you will also have 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 require specific methods to maintain the required records.
As soon as you turn into a vat registered trader in the UK then you will need to follow vat regulations which have been specified by the hmrc vat department. These techniques are not very difficult and by maintaining proper vat accounting standards, it will become easy for you as well as the hmrc to get access to your vat records.