If you have shifted to vat or value added tax system then you need to keep vat accounting standards for quick entry to VAT records. Although most eu countries including the UK do not have rigid or set standards to maintain vat records Www.vatcheck.com/vat/, you still need to ensure that all relevant vat figures can be easily obtainable in case the hmrc vat department asks for them or pays a visit.
In the last decade, an increasing number of countries including those from the EU have shifted their tax system on goods and services to vat. This system taxes services and goods every time there’s a transaction, thus raising revenues for governments while ensuring minimal tax leaks. If you’re a trader in the UK then you certainly may have turned into a vat registered trader once your taxable sales might have hit the vat threshold limit of ?70,000 in the last 1 year.
Once you become part within 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 that 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 product or service sold to the clients. Whenever you purchase services or goods from vat registered traders then you will also have to check if their invoices too stick to the same format as per hmrc vat.
Furthermore, the hmrc will also specify the regularity of filing vat returns so that all vat that has been collected by you on your sales might be paid to your government. Your vat returns will need to give a summary for vat paid on purchases and vat collected on taxable sales. For those who like to go into for a 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 consistently.
In the UK, you will also need to maintain up-to-date vat accounting records such as banking accounts, profit and loss accounts, cash books, sales and purchase books, delivery notes, along with books of accounts relevant to your business. In case you deal in goods or services that attract reduced vat rates, zero vat rates, or are vat exempt then you will also have to clearly specify the classification of those goods or services in your records. There are many accounting schemes in vat such as annual accounting scheme, cash accounting scheme, flat rate scheme, retail schemes, and second-hand goods scheme that will need specific techniques to maintain the required records.
As soon as you are a vat registered trader in the UK then you’ll have to follow vat rules and regulations which have been specified by the hmrc vat department. These techniques are certainly not very difficult 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.