Once you have turned into a vat registered trader in the United Kingdom or perhaps some other country that follows vat then you should maintain complete vat books for trouble free accounting. These books of accounts need to record and display each vat transaction in detail, and can be of great help if you're subjected to a vat audit.
In the United Kingdom you will have to go for vat registration upon completing 70,000 sterling pounds of taxable sales in the last one year of your business, although you could do so before reaching that vat threshold limit. After 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. While there is no set way of maintaining books of accounts specifically for vat, you still have to be sure 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 assorted parties even if they were conducted in other countries, etc.
These details will also need to be summarized whenever you file regular vat returns on a yearly, quarterly or monthly basis, as decided by hmrc vat department. Your vat invoice too will specifically need to display your vat number, vat rate for each service or product, and also the total vat amount collected against that sales invoice http://vatnumbers.com. All this data should also be mentioned in the sales books even as all purchase invoices will need to be summarized in your purchase books. Moreover, maintaining bank and cash books is mandatory 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 and even your vat refunds and may choose to conduct a vat audit of your business. In such a case, vat officers might visit your business premises and would want to go over all of your books of accounts to confirm certain doubts lingering in their minds. They may cross check vat invoices with your sales books or request certain confirmations on specific vat transactions simply to confirm if they were indeed genuine ones. If all of your books of accounts related to vat are typically in order then that would create a favourable impression with those vat officers and also prevent any penalties from striking down your business plus your reputation.
If you have any problems to understand what is vat then you definitely go in for the expertise of a good vat agent that can assist you to create and maintain all books of accounts related to vat in a clear and methodical manner check my reference. You need to keep your books of accounts connected with vat for a duration of 6 years. Various vat schemes require different kinds of books and your vat agent could assist you about the right format for your business depending on your scheme and vat classifications of your goods and services.
Maintaining proper books of accounts can help you to conduct your small business in a clear and seamless manner. In case you too have adopted vat in the United Kingdom then you will definitely need to maintain complete vat books for trouble free accounting and auditing.