After you have converted 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 hassle free accounting. These books of accounts have to record and display each vat transaction in detail, and may be of great help if you are put through a vat audit vat registration.
In the UK you’ll have to go for vat registration upon completing 70,000 sterling pounds of taxable sales in the previous twelve months of your business, although you could do this before reaching that vat threshold limit. After you have become a vat registered trader in the UK then you’ll have 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 specifically for vat, you will still have to be sure you store all specifics of vat paid and collected including invoice numbers, dates, vat rates, vat amounts, names and addresses of your dealings with various parties even though these were conducted in other countries, etc.
These records should also be summarized whenever you file regular vat returns on the yearly, quarterly or monthly basis, as decided by hmrc vat department. Your vat invoice too will specifically need to display your vat number, vat rate for every product or service, and the total vat amount collected against that sales invoice. All of this data will also need to be mentioned in the sales books whilst all purchase invoices will have to be summarized in your 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 very important since vat officers at hmrc might compare your vat returns or even your vat refunds and might choose to conduct a vat audit of your business. When this happens, vat officers might call at your business premises and may want to look at all your books of accounts to verify certain doubts lingering in their minds. They might cross check vat invoices with your sales books or ask for certain confirmations on specific vat transactions simply to confirm if they were indeed genuine ones. If all of your books of accounts related to vat are in order then that will create a favourable impression with those vat officers as well as prevent any penalties from striking down your business plus your reputation.
If you have any problems in understanding what exactly is vat then you definitely should go looking for the expertise of a capable vat agent that can assist you to create and maintain all books of accounts associated with vat in a clear and methodical manner. You need to maintain books of accounts related to vat for a period of 6 years. Various vat schemes require different types of books and your vat agent would be able to assist you about the right format for your business based on your scheme and vat classifications of your services and goods wikipedia reference.
Maintaining proper books of accounts will help you to conduct your business in a clear and seamless manner. In case you too have adopted vat in the United Kingdom then you’ll definitely have to maintain complete vat books for trouble free accounting and auditing.
