Once you have turned 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 need to record and display each vat transaction in greater detail, and may be of great help if you’re put through a vat audit.
In the United Kingdom you’ll have to go for vat registration upon completing 70,000 sterling pounds of taxable sales in the last one year of your business, although you can still do this before reaching that vat threshold limit. After you have turned into 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. Although there is no set means of maintaining books of accounts specifically for vat, you will still need to ensure that you store all specifics 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 in other countries, 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 have to display your vat number, vat rate for each service or product, and also the total vat amount collected against that sales invoice vat numbers. All this data should also be mentioned in the sales books even as all purchase invoices will need to be summarized in your purchase books. In addition, 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 may decide to conduct a vat audit of your business. In such a case, vat officers might call at your business premises and may want to go over all your books of accounts to verify certain doubts lingering in their minds. They may cross check vat invoices with all 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 related to vat are in order then that will create 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 to understand what exactly is vat then you go looking 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 going here. You 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 would be able to assist 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. In case you too have adopted vat in the United Kingdom then you will definitely need to maintain complete vat books for trouble free accounting and auditing.