Once you have converted into a vat registered trader in the United Kingdom or even in any other country that follows vat you then 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 may be of great help if you are subjected to 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 previous twelve months of your business, even though you can still do so before reaching that vat threshold limit. Once you have turned into a vat registered trader in the United Kingdom then you will 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 especially 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 various parties even though they were conducted abroad, etc.
These records 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 every service or product, and the total vat amount collected against that sales invoice vat numbers. All of this data will also need to be mentioned in your sales books whilst 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 might choose to conduct a vat audit of your business. When this happens, vat officers might call at your business premises and would want to go over all of your books of accounts to verify certain doubts lingering in their minds. They may 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 your books of accounts related to vat are in order then that will make a favourable impression with those vat officers as well as prevent any penalties from striking down your organization as well as your reputation.
In case you have any problems in understanding what exactly is vat then you definitely should 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 your domain name. 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 guide 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 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’ll definitely need to maintain complete vat books for hassle free accounting and auditing.