After you have turned into a vat registered trader in the UK or even in any other country that follows vat you then should maintain complete vat books for trouble free accounting Vat Verification. These books of accounts have to record and display each vat transaction in greater detail, and may be of great help if you are put through a vat audit.
In the UK 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, although you could do this before reaching that vat threshold limit. Once you have become a vat registered trader in the United Kingdom then you’ll 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 you store all specifics of vat paid and collected including invoice numbers, dates, vat rates, vat amounts, names and addresses of your respective dealings with assorted parties even though these were conducted in other countries, etc.
These details should also be summarized whenever you file regular vat returns on the 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. All of this data will also need to be mentioned in your sales books even as all purchase invoices will need to be summarized in the 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 extremely important since vat officers at hmrc might compare your vat returns or even your vat refunds and might decide to conduct a vat audit of your business. When this happens, vat officers might visit your business premises and may want to go over all of your books of accounts to verify certain doubts lingering in their minds. They might cross check vat invoices with your sales books or ask for certain confirmations on specific vat transactions only to confirm if they were indeed genuine ones. If all of your books of accounts related to vat are typically in order then that will create a favourable impression with those vat officers as well as prevent any penalties from striking down your business plus your reputation.
If you have any problems in understanding what is vat then you certainly go looking for the expertise of a good vat agent that can help you to create and maintain all books of accounts related to vat in a clear and methodical manner read more. You will need to maintain books of accounts connected with vat for a period of 6 years. Various vat schemes require different types of books and your vat agent could assist you about the right format for your business based on your scheme and vat classifications of your goods and services.
Maintaining proper books of accounts will help you to conduct your small business in a clear and seamless manner. If you too have adopted vat in the UK then you will definitely have to maintain complete vat books for hassle free accounting and auditing.