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Maintain vat accounting standards for easy entry to vat records


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In case you have shifted to vat or value added tax system you’ll need to keep vat accounting standards for easy access to VAT records. Although most eu countries like the UK do not have rigid or set standards to maintain vat records, you still must make sure that all relevant vat figures can be accessible in case the hmrc vat department asks for them or pays a visit.

In the last decade, an increasing number of countries including those within the European Union have shifted their tax system on services and goods to vat. This system taxes goods and services each time there’s a transaction, thus raising revenues for governments while ensuring minimal tax leaks. If you are a trader in the United Kingdom then you might have converted into a vat registered trader as soon as your taxable sales would have hit the vat threshold limit of ?70,000 in the last 12 months.

Once you become part within 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 which will have to be mentioned in each vat invoice that you’ll be needed to generate with each sale. You will also ought to display vat rates of every products or services sold to your clients. When 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 per hmrc vat.

Furthermore, the hmrc will also specify the regularity of filing vat returns to ensure 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. In case you want to go in for a vat reclaim or vat refund then 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 consistently.

In the United Kingdom, you’ll need to maintain up-to-date vat accounting records such as bank accounts, profit and loss accounts, cash books, sales and purchase books, delivery notes, and other books of accounts relevant to your enterprise. If you deal in 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 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 techniques to maintain the required records.

Once you turn into a vat registered trader in the UK then you’ll have to follow vat regulations that have been specified by the hmrc vat department. These methods are not very difficult and by maintaining proper vat accounting standards, it will become easy for you as well as the hmrc to have access to your vat records.