Maintain vat accounting standards for easy entry to vat records

If you have shifted over to vat or value added tax system you’ll need to keep vat accounting standards for quick access to VAT records. Although most eu countries including the UK do not have rigid or set standards to keep vat records, you will still need to ensure that relevant vat figures are easily easily obtainable in case the hmrc vat department asks for them or pays a visit.

Over the past decade, an increasing number of countries including those from the European Union have shifted their tax system on goods and services to vat. This system taxes services and goods 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 converted 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 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’ll be issued a unique vat number which will need 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 the clients. When you purchase services or goods from vat registered traders you will also need to check 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 might be paid to your government. Your vat returns will need to provide 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 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 help you to speedily complete all vat formalities consistently.

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 enterprise. If you deal in services or goods that attract reduced vat rates, zero vat rates, or are vat exempt then you will also need to clearly specify the classification of those goods or services 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 require specific methods to maintain the required records.

As soon as you turn into a vat registered trader in the United Kingdom 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 and the hmrc to get access to your vat records.