In case you have shifted over to vat or value added tax system then you need to maintain vat accounting standards for easy entry to VAT records. Although most eu countries like the UK do not have rigid or set standards to keep vat records, you will still must make sure that all relevant vat figures can be easily obtainable in case the hmrc vat department asks for them or pays a visit.
In the last decade, an increasing number of countries including those within the European Union have shifted their tax system on goods and services to vat. This system taxes services and goods each time there is a www.vatverification.com transaction, thus raising revenues for governments while ensuring minimal tax leaks. If you are a trader in the UK then you certainly may have converted into a vat registered trader once your taxable sales would have hit the vat threshold limit of ?70,000 in the previous 1 year.
Once you become an integral part within the cycle of vat tax chain then you will need 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 that 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 every products or services sold to the clients. When you purchase goods or services from vat registered traders you will also have to check if their invoices too follow the same format as specified by hmrc vat.
In addition, the hmrc will even specify the regularity of filing vat returns so that all vat that has been collected by you on your sales can be paid to your government. Your vat returns will have to give a summary for vat paid on purchases and vat collected on taxable sales. In case you want to go into 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 on a regular basis.
In the UK, you’ll 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, along with books of accounts relevant to your enterprise. If you deal in goods or services that attract reduced vat rates, zero vat rates, or are vat exempt then you will also have to clearly specify the classification of such 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 need specific methods to maintain your required records.
Once you are 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 very easy for you as well as the hmrc to have access to your vat records.