Maintain vat accounting standards for easy 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 like the UK don’t have rigid or set standards to keep vat records, you 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 within the European Union have shifted their tax system on goods and services to vat. This method taxes goods and services each time there’s a vatverification transaction, thus raising revenues for governments while ensuring minimal tax leaks. If you’re a trader in the UK then you may have converted into a vat registered trader as soon as 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 then 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 have to be mentioned in each vat invoice that you will now be required to generate with each sale. You will also have to display vat rates of each product or service sold to your clients. When you purchase services or goods from vat registered traders you will also have to check if their invoices too stick to the same format as per 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 might 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. 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 and this should help you to speedily complete all vat formalities consistently.

In the United Kingdom, you’ll have to maintain up-to-date vat accounting records such as banking 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 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 such goods or services within 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 need specific techniques to maintain your required records.

Once you are a vat registered trader in the UK then you will need to follow vat rules and regulations which have been specified by the hmrc vat department. These methods are not very difficult and by maintaining proper vat accounting standards, it will become very easy for you and the hmrc to have access to your vat records.