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 easy 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 all relevant vat figures are easily accessible in case the hmrc vat department wants them or pays a visit.

Over the past decade, a lot more countries including those from 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 may 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.

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 unique vat number which will have to be mentioned in each vat invoice that you’ll now be required to generate with each sale. Additionally, you will ought to display vat rates of each product or service 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 per hmrc vat.

Furthermore, the hmrc will even specify the frequency of filing vat returns to ensure that all vat that has been collected by you, on your sales can 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 any vat reclaim or vat refund 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 and this should help you to speedily complete all vat formalities on a regular basis.

In the UK, you will also have 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 relevant to your business. In case you deal in goods or services that attract reduced vat rates, zero vat rates, or are vat exempt then you’ll also need to clearly specify the classification of those goods or services in 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.

As soon as you turn into a vat registered trader in the United Kingdom then you’ll need to follow vat regulations which have been specified by the hmrc vat department. These methods are certainly not very difficult and also by maintaining proper vat accounting standards, it will become very easy for you personally as well as the hmrc to have access to your vat records.