Maintain vat accounting standards for convenient access to vat records

If 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 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 from the European Union have shifted their tax system on services and goods to vat. This system 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 United Kingdom 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 previous 12 months.

When you become 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’ll be issued a unique vat number that will need to be mentioned in each vat invoice that you will be required to generate with each sale. You will also have to display vat rates of each product or service sold to your clients. Whenever you purchase services or goods from vat registered traders then you will also have to see if their invoices too follow the same format as specified by hmrc vat.

Furthermore, the hmrc will also specify the regularity of filing vat returns to ensure that all vat that has been collected by you, on your sales might be paid to your government. Your vat returns will have to provide a summary for vat paid on purchases and vat collected on taxable sales. For those who like to go in for any 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 enable you to speedily complete all vat formalities on a regular basis.

In the United Kingdom, you will also have to maintain up-to-date vat accounting records including banking accounts, profit and loss accounts, cash books, sales and purchase books, delivery notes, along with books of accounts relevant to your enterprise. In case 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 those services or goods in 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 require specific methods to maintain the required records.

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