Maintain vat accounting standards for easy entry to vat records

In case you have shifted over to vat or value added tax system then you need to keep vat accounting standards for quick entry to VAT records. Although most eu countries like the UK do not have rigid or set standards to maintain vat records, you will still must make sure that relevant vat figures can be 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 European Union have shifted their tax system on goods and services to vat. This method 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 certainly might have converted into a vat registered trader once your taxable sales would have hit the vat threshold limit of ?70,000 in the previous 12 months.

Once you become an integral part in the cycle of vat tax chain 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 distinctive vat number that will need to be mentioned in each vat invoice that you’ll now be needed to generate with each sale. Additionally, you will have to display vat rates of every products or services sold to your clients. When you purchase goods or services from vat registered traders then you will also have 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 so that all vat that’s been collected by you on your sales can be paid to the government. Your vat returns will need to provide a summary for vat paid on purchases and vat collected on taxable sales. For those who like to go into for any 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 which should enable you to speedily complete all vat formalities on a regular basis.

In the UK, you’ll need to maintain up-to-date vat accounting records such as banking accounts, profit and loss accounts, cash books, sales and purchase books, delivery notes, along with books of accounts relevant to your enterprise. If 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 goods or services 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 require specific methods to maintain the required records.

Once you turn into a vat registered trader in the UK then you’ll need to follow vat regulations which have been specified by the hmrc vat department. These methods are certainly not really hard and also by maintaining proper vat accounting standards, it will become very easy for you and the hmrc to get access to your vat records.