Maintain complete vat books for trouble free accounting

Once you have turned into a vat registered trader in the UK or even in any 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 are subjected to a vat audit.

In the UK you will have to opt for vat registration upon completing 70,000 sterling pounds of taxable sales in the previous twelve months of you business, although you can still do so before reaching that vat threshold limit. Once you have become 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 specifically for vat, you will still need to ensure 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 various parties even if they were conducted in other countries, etc.

These details will also need to be summarized when 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 product or service, and the total vat amount collected against that sales invoice. All this data will also need to be mentioned in your sales books even as all purchase invoices will need to be summarized in your purchase books. In addition, 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 or even your vat refunds and might decide 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 your books of accounts to verify certain doubts lingering in their minds. They might cross check vat invoices with your sales books or ask for certain confirmations on specific vat transactions simply to confirm if they were indeed genuine ones. If all your books of accounts pertaining to vat are in order then that would create a favourable impression with those vat officers as well as prevent any penalties from striking down your business as well as your reputation.

If you have any problems in understanding what is vat then you should go in for the services of a capable vat agent that can help you to create and maintain all books of accounts related to vat in a clear and methodical manner. You will need to keep your books of accounts related to vat for a period of 6 years. Various vat schemes require different types of books and your vat agent would be able to guide you on 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 need to maintain complete vat books for trouble free accounting and auditing.