After you have converted into a vat registered trader in the United Kingdom or perhaps some other country that follows vat you then should maintain complete vat books for hassle free accounting Vat Verification. These books of accounts need to record and display each vat transaction in detail, and can be of great help if you’re put through 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 last twelve months of your business, even though you can still do so before reaching that vat threshold limit. Once you have become a vat registered trader in the UK 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 means of maintaining books of accounts especially for vat, you will still have to be sure 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 if they were conducted in other countries, etc.
These records should also be summarized when you file regular vat returns on the 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 each product or service, and also the total vat amount collected against that sales invoice. All this data should also be mentioned in your sales books even as all purchase invoices will have 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 very important since vat officers at hmrc might compare your vat returns or even your vat refunds and might 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 request certain confirmations on specific vat transactions only to confirm if they were indeed genuine ones. If all of your books of accounts pertaining to vat are typically in order then that will create a favourable impression with those vat officers and also prevent any penalties from striking down your organization as well as your reputation.
In case you have any problems to understand what is vat then you definitely go in for the expertise of a good vat agent that can assist you to create and keep all books of accounts associated with vat in a clear and methodical manner our site. You will need to keep your books of accounts connected with vat for a period of 6 years. Various vat schemes require different types of books and your vat agent would be able to assist 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 business in a clear and seamless manner. In case you too have adopted vat in the UK then you will definitely need to maintain complete vat books for trouble free accounting and auditing.