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 maintain vat accounting standards for quick access to VAT records. Although most eu countries including the UK don’t have rigid or set standards to keep vat records, you still must make sure that relevant vat figures are easily easily obtainable in case the hmrc vat department wants them or pays you a visit.

Over the past decade, a lot more countries including those from the European Union have shifted their tax system on goods and services to vat. This method taxes services and goods each time there is a transaction, thus raising revenues for governments while ensuring minimal tax leaks. If you’re a trader in the United Kingdom then you may have converted into a vat registered trader once your taxable sales might have hit the vat threshold limit of ?70,000 in the last 12 months.

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’ll be issued a distinctive vat number which will need to be mentioned in each vat invoice that you’ll now be required to generate with each sale. Additionally, you will have to display vat rates of every product or service sold to the clients. Whenever you purchase services or goods from vat registered traders you will also need to check if their invoices too stick to the same format as per hmrc vat.

Furthermore, the hmrc will even specify the regularity of filing vat returns to ensure that all vat that’s 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. For those who like to go into for a 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 which should enable you to speedily complete all vat formalities consistently.

In the UK, you’ll 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, along with books of accounts relevant to your enterprise. If you offer goods or services 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 within 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 techniques to maintain your required records.

As soon as you are 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 techniques are not very difficult and by maintaining proper vat accounting standards, it will become easy for you personally and the hmrc to have access to your vat records.