If you have shifted to vat or value added tax system you'll need to keep vat accounting standards for easy entry to VAT records. Although most eu countries including the UK don't have rigid or set standards to maintain vat records, you will still need to ensure that relevant vat figures are easily accessible in case the hmrc vat department asks for them or pays a visit.
Over the past decade, a lot more countries including those within the EU have shifted their tax system on goods and services to vat. This system taxes services and goods every time there is a vatverification.com transaction, thus raising revenues for governments while ensuring minimal tax leaks. If you're a trader in the United Kingdom then you may have converted into a vat registered trader once your taxable sales would have hit the vat threshold limit of ?70,000 in the previous 12 months.
When you become part within the cycle of vat tax chain you will need 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 needed to generate with each sale. You will also have to display vat rates of every products or services sold to your clients. When you purchase services or goods from vat registered traders you will also have to check if their invoices too stick to the same format as specified by hmrc vat.
Furthermore, the hmrc will even specify the regularity of filing vat returns to ensure that all vat that's been collected by you on your sales might be paid to the government. Your vat returns will have to provide a summary for vat paid on purchases and vat collected on taxable sales. For those who like to go into for any 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 which should help you to speedily complete all vat formalities on a regular basis.
In the UK, you'll have to maintain up-to-date vat accounting records such as bank accounts, profit and loss accounts, cash books, sales and purchase books, delivery notes, along with books of accounts relevant to your business. If you deal in goods or services that attract reduced vat rates, zero vat rates, or are vat exempt then you'll also have to clearly specify the classification of those services or goods within your records. There are many accounting schemes in vat like annual accounting scheme, cash accounting scheme, flat rate scheme, retail schemes, and second-hand goods scheme that will require specific techniques to maintain your required records.
As soon as you turn into a vat registered trader in the UK then you will need to follow vat rules and regulations which have been specified by the hmrc vat department. These techniques are not really hard and also by maintaining proper vat accounting standards, it will become very easy for you and the hmrc to get access to your vat records.