Once you have turned 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 hassle free accounting. These books of accounts have to record and display each vat transaction in greater detail, and can be of great help if you’re subjected to a vat audit.
In the United Kingdom you will have to go for vat registration upon completing 70,000 sterling pounds of taxable sales in the previous one year of your business, even though you could do so before reaching that vat threshold limit. After you have turned into a vat registered trader in the United Kingdom then you will 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 will still have to be sure that you store all details of vat paid and collected including invoice numbers, dates, vat rates, vat amounts, names and addresses of your respective dealings with various parties even though these were conducted in other countries, etc.
These details will also need to 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 have to display your vat number, vat rate for every service or product, and the vat check total vat amount collected against that sales invoice. All this data will also need to be mentioned in the sales books even as 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 and 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 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 as well as prevent any penalties from striking down your business plus your reputation.
In case you have any problems to understand what exactly is vat then you definitely go looking for the services 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. You will need to maintain books of accounts related to vat for a period of 6 years. Various vat schemes require different kinds of books and your vat agent would be able to guide you on the right format for your business based 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. If you too now utilize vat in the United Kingdom then you will definitely need to maintain complete vat books for trouble free accounting and auditing.