Once you have converted 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 http://vatverification.com. These books of accounts need to record and display each vat transaction in greater detail, and may be of great help if you’re 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 previous one year of your business, even though you could do so before reaching that vat threshold limit. Once you have turned into a vat registered trader in the UK then you will have to obey all applicable vat rules framed by HM Revenue and Customs department or hmrc vat department. Although there is no set means of maintaining books of accounts especially for vat, you will still need to ensure 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 assorted parties even if these were conducted abroad, 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 need to display your vat number, vat rate for every service or product, 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 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 visit your business premises and would want to look at all your books of accounts to verify certain doubts lingering in their minds. They may cross check vat invoices with 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 will 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 in understanding what is vat then you certainly should go looking for the expertise of a good vat agent that can assist you to create and maintain all books of accounts associated with vat in a clear and methodical manner continue. You need to keep your books of accounts connected with vat for a duration of 6 years. Various vat schemes require different types of books and your vat agent would be able to guide you about the right format for your business based on your scheme and vat classifications of your services and goods.
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 UK then you’ll definitely need to maintain complete vat books for trouble free accounting and auditing.