In case you have shifted over to vat or value added tax system you’ll need to keep vat accounting standards for easy 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 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, an increasing number of countries including those within the EU have shifted their tax system on goods and services to vat. This system taxes goods and services every time there’s a transaction, thus raising revenues for governments while ensuring minimal tax leaks. If you are a trader in the UK then you might have turned into a vat registered trader once 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 need 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’ll now be required to generate with each sale. You will also ought to display vat rates of each product or service sold to the clients. Whenever you purchase goods or services 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 also specify the frequency of filing vat returns so that all vat that has 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. 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 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 such as banking accounts, profit and loss accounts, cash books, sales and purchase books, delivery notes, and other 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’ll also have to clearly specify the classification of such services or goods 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.
As soon as you are a vat registered trader in the UK then you’ll need to follow vat regulations that have been specified by the hmrc vat department. These methods are certainly not very difficult and also by maintaining proper vat accounting standards, it will become very easy for you personally as well as the hmrc to have access to your vat records.