Once you have converted into a vat registered trader in the UK or perhaps some other country that follows vat then you should maintain complete vat books for trouble free accounting Vat Verification. These books of accounts need 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 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 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 way of maintaining books of accounts especially for vat, you will still need to ensure that you store all specifics of vat paid and collected including invoice numbers, dates, vat rates, vat amounts, names and addresses of your respective dealings with various parties even though they were conducted abroad, etc.
These details should also 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 have to display your vat number, vat rate for each product or service, and also the 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 have to be summarized in the 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 very important since vat officers at hmrc might compare your vat returns and even your vat refunds and might decide to conduct a vat audit of your business. When this happens, vat officers might call at your business premises and may want to go over all your books of accounts to verify certain doubts lingering in their minds. They might 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 pertaining 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 as well as your reputation.
If you have any problems in understanding what exactly is vat then you certainly should go looking for the expertise of a good vat agent that can help you to create and maintain all books of accounts related to vat in a clear and methodical manner my blog. You need to keep your books of accounts connected with vat for a period 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 based on your scheme and vat classifications of your goods and services.
Maintaining proper books of accounts can help you to conduct your business in a clear and seamless manner. If you too have adopted vat in the UK then you will definitely have to maintain complete vat books for hassle free accounting and auditing.