After you have converted into a vat registered trader in the United Kingdom or even in some other country that follows vat then you 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 are put through a vat audit.
In the UK you’ll have to opt for vat registration upon completing 70,000 sterling pounds of taxable sales in the last one year of your business, even though you can still do this before reaching that vat threshold limit. Once you have turned into 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. While there is no set way of maintaining books of accounts specifically for vat, you 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 records 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 have to display your vat number, vat rate for each product or service, and the www.vatcheck.com 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 have to be summarized in your purchase books. In addition, 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. In such a case, vat officers might call at your business premises and may want to look at 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 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 and also prevent any penalties from striking down your organization as well as your reputation.
If you have any problems in understanding what is vat then you certainly should go looking for the services of a good vat agent that can help you to create and maintain all books of accounts associated with 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 types of books and your vat agent could guide you about the right format for your business depending on your scheme and vat classifications of the goods and services.
Maintaining proper books of accounts will help you to conduct your business in a clear and seamless manner. If you too have adopted vat in the UK then you’ll definitely have to maintain complete vat books for hassle free accounting and auditing.