After you have converted into a vat registered trader in the United Kingdom or even in any other country that follows vat then you should maintain complete vat books for trouble 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 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 twelve months of your business, although you could do so 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. Although there is no set way of maintaining books of accounts specifically 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 records will also need to 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 every product or service, and the total vat amount collected against that sales invoice www.vatnumbers.com. All of this data should also be mentioned in the sales books even as all purchase invoices will need to be summarized in the purchase books. Moreover, 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 call at your business premises and would want to go over all of your books of accounts to confirm certain doubts lingering in their minds. They may cross check vat invoices with your sales books or request certain confirmations on specific vat transactions simply to confirm if they were indeed genuine ones. If all your books of accounts pertaining to vat are typically in order then that would create 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 in understanding what is vat then you definitely should go in for the expertise of a capable vat agent that can help you to create and maintain all books of accounts related to vat in a clear and methodical manner check this out. 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 assist 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 can help you to conduct your business in a clear and seamless manner. In case you too now utilize vat in the United Kingdom then you will definitely have to maintain complete vat books for hassle free accounting and auditing.