If you have shifted to vat or value added tax system you’ll need to maintain vat accounting standards for easy entry to VAT records. Although most eu countries like the UK don’t have rigid or set standards to maintain vat records Www.vatcheck.com/vat/, you will still need to ensure that relevant vat figures are easily accessible in case the hmrc vat department asks for them or pays a visit.
In the last decade, a lot more countries including those within the European Union have shifted their tax system on goods and services to vat. This method 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 UK then you may 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 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 which will need to be mentioned in each vat invoice that you will be required to generate with each sale. You will also ought to display vat rates of each 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 frequency 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 have to provide 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 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 help you to speedily complete all vat formalities consistently.
In the UK, you’ll need to maintain up-to-date vat accounting records including bank accounts, profit and loss accounts, cash books, sales and purchase books, delivery notes, and other books of accounts relevant to your enterprise. In case 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 services or goods in your records. There are various 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 your required records.
As soon as you turn into a vat registered trader in the United Kingdom then you will have to follow vat regulations that have been specified by the hmrc vat department. These techniques are certainly not very difficult and by maintaining proper vat accounting standards, it will become easy for you as well as the hmrc to get access to your vat records.