Maintain vat accounting standards for convenient access to vat records

If you have shifted to vat or value added tax system then you need to keep vat accounting standards for easy access to VAT records. Although most eu countries like the UK don’t have rigid or set standards to keep vat records, you still need to ensure that relevant vat figures are easily accessible in case the hmrc vat department asks for them or pays you a visit.

Over the past decade, a lot more 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 is a transaction, thus raising revenues for governments while ensuring minimal tax leaks. If you’re 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 12 months.

When 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 will be issued a distinctive vat number which will need to be mentioned in each vat invoice that you’ll be required to generate with each sale. You will also have to display vat rates of each 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 frequency of filing vat returns so that all vat that’s been collected by you on your sales might be paid to your government. Your vat returns will need to give 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 should 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 United Kingdom, you will also need to maintain up-to-date vat accounting records including banking 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 will also have to clearly specify the classification of those services or goods 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 need specific methods to maintain your required records.

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