Once you have converted into a vat registered trader in the UK or even in some 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 can be of great help if you are put through a vat audit.
In the United Kingdom you'll have to opt for vat registration upon completing 70,000 sterling pounds of taxable sales in the previous one year of your business, although you could 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 especially for vat, you still have to be sure you store all details 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 they were conducted in other countries, etc.
These records 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 each product or service, and the vatcheck total vat amount collected against that sales invoice. All of this data should also be mentioned in your sales books whilst all purchase invoices will need to be summarized in the purchase books. Moreover, 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 may choose 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 of your books of accounts to confirm certain doubts lingering in their minds. They might cross check vat invoices with your sales books or request certain confirmations on specific vat transactions only to confirm if they were indeed genuine ones. If all your books of accounts pertaining to vat are in order then that will make a favourable impression with those vat officers and also prevent any penalties from striking down your organization as well as your reputation.
In case you have any problems in understanding what is vat then you should go looking for the services of a good vat agent that can help you to create and maintain all books of accounts associated with vat in a clear and methodical manner. You 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 would be able to assist you about the right format for your business depending on your scheme and vat classifications of the services and goods.
Maintaining proper books of accounts will help you to conduct your business in a clear and seamless manner. In case you too now utilize vat in the United Kingdom then you'll definitely need to maintain complete vat books for trouble free accounting and auditing.