Once you have turned into a vat registered trader in the UK or perhaps any other country that follows vat then you should maintain complete vat books for trouble free accounting. These books of accounts need 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 will have to opt for vat registration upon completing 70,000 sterling pounds of taxable sales in the previous twelve months of your business, although you could do so before reaching that vat threshold limit. Once you have become a vat registered trader in the UK 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 way of maintaining books of accounts especially for vat, you 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 dealings with various parties even though they were conducted in other countries, 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 every service or product, and also the total vat amount collected against that sales invoice vatnumbers.com. All this data will also need to be mentioned in your sales books whilst all purchase invoices will need to be summarized in the purchase books. Moreover, 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 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 may want to go over all of your books of accounts to confirm certain doubts lingering in their minds. They might cross check vat invoices with all your sales books or request 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 business plus your reputation.
In case you have any problems to understand what exactly is vat then you definitely should go in for the services of a capable vat agent that can help you to create and maintain all books of accounts associated with vat in a clear and methodical manner next page. You will need to keep your books of accounts related to vat for a duration of 6 years. Various vat schemes require different types of books and your vat agent could guide you on the right format for your business based on your scheme and vat classifications of your goods and services.
Maintaining proper books of accounts can help you to conduct your small 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.