If you have shifted over to vat or value added tax system then you need to maintain vat accounting standards for quick access to VAT records. Although most eu countries like the UK do not have rigid or set standards to maintain vat records vatcheck.com/vat/, you will still need to ensure that relevant vat figures can be easily obtainable in case the hmrc vat department wants them or pays a visit.
Over the past decade, an increasing number of countries including those from the EU have shifted their tax system on services and goods to vat. This method taxes services and goods each time there is a transaction, thus raising revenues for governments while ensuring minimal tax leaks. If you’re a trader in the UK then you might have turned into a vat registered trader once your taxable sales would 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 then you will need to follow certain guidelines imposed by the HM Revenue and Customs department or hmrc department regarding vat accounting. You’ll be issued a unique vat number which will have to be mentioned in each vat invoice that you’ll be required to generate with each sale. Additionally, you will have to display vat rates of every products or services sold to the clients. Whenever you purchase goods or services from vat registered traders you will also have to check if their invoices too stick to the same format as per hmrc vat.
In addition, the hmrc will also specify the frequency of filing vat returns so that all vat that has 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 should 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 including bank accounts, profit and loss accounts, cash books, sales and purchase books, delivery notes, along with books of accounts relevant to your business. In case you offer services or goods that attract reduced vat rates, zero vat rates, or are vat exempt then you will also have to clearly specify the classification of those services or goods within your records. There are many accounting schemes in vat such as annual accounting scheme, cash accounting scheme, flat rate scheme, retail schemes, and second-hand goods scheme that will need specific techniques to maintain the required records.
As soon as you turn into a vat registered trader in the United Kingdom then you will need to follow vat regulations that have been specified by the hmrc vat department. These techniques are certainly not very difficult and by maintaining proper vat accounting standards, it will become very easy for you as well as the hmrc to have access to your vat records.