After you have turned into a vat registered trader in the United Kingdom or perhaps some other country that follows vat then you 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 subjected to a vat audit.
In the United Kingdom you’ll have to opt for vat registration upon completing 70,000 sterling pounds of taxable sales in the last 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 United Kingdom then you’ll need to obey all applicable vat rules framed by HM Revenue and Customs department or hmrc vat department. While there is no set means of maintaining books of accounts specifically for vat, you 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 should also 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 need to display your vat number, vat rate for each 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 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 very important since vat officers at hmrc might compare your vat returns or even your vat refunds and may choose to conduct a vat audit of your business. When this happens, vat officers might call at your business premises and would want to go over all of your books of accounts to verify certain doubts lingering in their minds. They might cross check vat invoices with all your sales books or ask for certain confirmations on specific vat transactions only to confirm if they were indeed genuine ones. If all your books of accounts related to vat are in order then that would make a favourable impression with those vat officers and also prevent any penalties from striking down your organization plus your reputation.
If you have any problems to understand what is vat then you certainly go looking for the expertise of a capable vat agent that can help you to create and keep all books of accounts associated with vat in a clear and methodical manner important link. You will need to keep your books of accounts related to vat for a period of 6 years. Various vat schemes require different kinds of books and your vat agent could guide you about the right format for your business based on your scheme and vat classifications of your 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’ll definitely need to maintain complete vat books for trouble free accounting and auditing.