Maintain vat accounting standards for convenient access to vat records

In case you have shifted to vat or value added tax system then you need to keep vat accounting standards for easy entry to VAT records. Although most eu countries including the UK do not have rigid or set standards to keep vat records, you will still must make sure that relevant vat figures can be easily obtainable in case the hmrc vat department wants them or pays you a visit.

Over the past decade, an increasing number of countries including those within the EU have shifted their tax system on services and goods 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 United Kingdom then you 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 12 months.

Once you become an integral part within the cycle of vat tax chain then 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 distinctive 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 have to display vat rates of every product or service sold to your clients. Whenever you purchase services or goods 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 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 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 help you to speedily complete all vat formalities consistently.

In the UK, you will also 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 offer goods or services that attract reduced vat rates, zero vat rates, or are vat exempt then you’ll also need 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 the required records.

Once you are 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 very easy for you and the hmrc to have access to your vat records.