In case 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 like the UK don't have rigid or set standards to keep vat records vatcheck.com/vat/, you will still need to ensure that all relevant vat figures are easily accessible 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 European Union have shifted their tax system on services and goods to vat. This system taxes goods and services each 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 might have converted into a vat registered trader once your taxable sales might have hit the vat threshold limit of ?70,000 in the last 12 months.
When 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 distinctive vat number which will need to be mentioned in each vat invoice that you will be needed to generate with each sale. You will also ought to display vat rates of every products or services sold to your clients. When you purchase services or goods from vat registered traders then you will also have to see if their invoices too stick to the same format as per 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 need to give a summary for vat paid on purchases and vat collected on taxable sales. In case you want to go in 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 which should help you to speedily complete all vat formalities on a regular basis.
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 highly relevant to your business. If you offer services or goods that attract reduced vat rates, zero vat rates, or are vat exempt then you will also need to clearly specify the classification of such goods or services 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 need specific techniques to maintain your required records.
Once you are a vat registered trader in the UK then you'll have to follow vat rules and regulations that have been specified by the hmrc vat department. These methods are not very difficult and also by maintaining proper vat accounting standards, it will become easy for you as well as the hmrc to have access to your vat records.