In case you have shifted over to vat or value added tax system then you need to keep vat accounting standards for quick access to VAT records. Although most eu countries like the UK do not have rigid or set standards to keep vat records vatcheck-com/vat/, you will still must make sure that relevant vat figures are easily accessible in case the hmrc vat department wants them or pays you a visit.
In the last decade, a lot more countries including those from the EU have shifted their tax system on goods and services to vat. This system taxes services and goods every time there is a transaction, thus raising revenues for governments while ensuring minimal tax leaks. If you are a trader in the United Kingdom then you certainly might have converted into a vat registered trader as soon as your taxable sales might have hit the vat threshold limit of ?70,000 in the last 1 year.
When you become an integral part in 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 that will need to be mentioned in each vat invoice that you will now be needed 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 follow the same format as per hmrc vat.
Furthermore, the hmrc will also specify the regularity of filing vat returns so that all vat that’s been collected by you, on your sales can 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 a vat reclaim or vat refund then 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 and this should enable 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 highly relevant to your business. In case you offer goods or services that attract reduced vat rates, zero vat rates, or are vat exempt then you will also have to clearly specify the classification of such 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 your required records.
Once you are a vat registered trader in the UK then you’ll need to follow vat rules and regulations which 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 personally and the hmrc to get access to your vat records.