Maintain vat accounting standards for convenient access to vat records

In case you have shifted over to vat or value added tax system you’ll need to maintain 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 still must make sure that all relevant vat figures can be easily obtainable in case the hmrc vat department asks for them or pays a visit.

In the last decade, an increasing number of countries including those from the EU have shifted their tax system on services and goods to vat. This system taxes services and goods every time there is 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 would have hit the vat threshold limit of ?70,000 in the previous 1 year.

Once 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 will be issued a unique vat number that will have to be mentioned in each vat invoice that you will be required to generate with each sale. Additionally, you will 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 check if their invoices too stick to the same format as per hmrc vat.

In addition, the hmrc will even specify the regularity of filing vat returns so that all vat that has been collected by you on your sales might 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. In case you want to go in 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 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 highly relevant to your business. If you deal in goods or services that attract reduced vat rates, zero vat rates, or are vat exempt then you will also need 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 methods to maintain the required records.

As soon as you are a vat registered trader in the UK then you will have 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 as well as the hmrc to have access to your vat records.