If you have shifted to vat or value added tax system then you need to maintain 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 Http://vatcheck.com/vat/, you still need to ensure that all relevant vat figures are easily easily obtainable 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 European Union have shifted their tax system on goods and services to vat. This system taxes services and goods 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 certainly might have turned into a vat registered trader as soon as your taxable sales might have hit the vat threshold limit of ?70,000 in the previous 12 months.
Once you become an integral part within the cycle of vat tax chain then you will have 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 need to be mentioned in each vat invoice that you will now be needed to generate with each sale. Additionally, you will ought to display vat rates of every product or service sold to the clients. When you purchase services or goods from vat registered traders you will also have to see if their invoices too stick to the same format as specified by hmrc vat.
In addition, 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 can 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 into for a 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 enable you to speedily complete all vat formalities on a regular basis.
In the UK, you will also have to maintain up-to-date vat accounting records including banking accounts, profit and loss accounts, cash books, sales and purchase books, delivery notes, along with books of accounts highly relevant to your enterprise. In case you deal in services or goods that attract reduced vat rates, zero vat rates, or are vat exempt then you’ll also need to clearly specify the classification of those services or goods in your records. There are various 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 methods to maintain the required records.
As soon as you are a vat registered trader in the UK then you will have to follow vat rules and regulations that 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 as well as the hmrc to get access to your vat records.