After you have converted into a vat registered trader in the UK or even in some other country that follows vat you then should maintain complete vat books for trouble free accounting http://vatverification.com. 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.
In the UK you’ll have to go 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 this before reaching that vat threshold limit. Once you have turned into a vat registered trader in the UK 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 way of maintaining books of accounts specifically for vat, you will still need to ensure that you store all specifics of vat paid and collected including invoice numbers, dates, vat rates, vat amounts, names and addresses of your respective dealings with assorted parties even though these were conducted in other countries, etc.
These details should also be summarized when you file regular vat returns on a 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 each product or service, and 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 the 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 may decide to conduct a vat audit of your business. When this happens, vat officers might visit your business premises and may want to go over 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 pertaining to vat are typically in order then that would create a favourable impression with those vat officers and also prevent any penalties from striking down your organization as well as your reputation.
If you have any problems in understanding what exactly is vat then you definitely go in for the expertise of a capable vat agent that can assist you to create and keep all books of accounts related to vat in a clear and methodical manner check this out. You need to maintain books of accounts connected with 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 on the right format for your business depending on your scheme and vat classifications of the services and goods.
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 will definitely have to maintain complete vat books for hassle free accounting and auditing.