If you have shifted to vat or value added tax system then you need to maintain vat accounting standards for easy access to VAT records. Although most eu countries including the UK don’t have rigid or set standards to keep vat records vatcheck.com/vat/, you will still must make sure that all relevant vat figures can be easily obtainable in case the hmrc vat department wants them or pays you a visit.
Over the past decade, a lot more countries including those from the EU have shifted their tax system on goods and services to vat. This method taxes services and goods every time there is a transaction, thus raising revenues for governments while ensuring minimal tax leaks. If you are a trader in the UK then you may have converted into a vat registered trader once your taxable sales would have hit the vat threshold limit of ?70,000 in the previous 12 months.
Once you become part in the cycle of vat tax chain you will have to follow certain guidelines imposed by the HM Revenue and Customs department or hmrc department regarding vat accounting. You will be issued a unique vat number which will need to be mentioned in each vat invoice that you will be required to generate with each sale. Additionally, you will ought to display vat rates of every products or services sold to the clients. Whenever you purchase goods or services from vat registered traders you will also have to check if their invoices too follow the same format as specified by hmrc vat.
In addition, the hmrc will also specify the regularity of filing vat returns so that all vat that’s been collected by you on your sales might be paid to your government. Your vat returns will have to provide a summary for vat paid on purchases and vat collected on taxable sales. In case you want to go in for any vat reclaim or vat refund there are separate vat forms that need to be filled up and delivered with documentary proof. The hmrc offers several vat online services including online filing of vat returns and this should enable you to speedily complete all vat formalities on a regular basis.
In the United Kingdom, you’ll need to maintain up-to-date vat accounting records including bank accounts, profit and loss accounts, cash books, sales and purchase books, delivery notes, along with books of accounts relevant to your enterprise. If you offer services or goods that attract reduced vat rates, zero vat rates, or are vat exempt then you will also have to clearly specify the classification of those services or goods within your records. There are many accounting schemes in vat like annual accounting scheme, cash accounting scheme, flat rate scheme, retail schemes, and second-hand goods scheme that will require specific techniques to maintain your required records.
Once you turn into a vat registered trader in the United Kingdom then you’ll have to follow vat regulations which have been specified by the hmrc vat department. These methods are certainly not really hard and by maintaining proper vat accounting standards, it will become easy for you as well as the hmrc to get access to your vat records.