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Maintain vat accounting standards for convenient entry to vat records


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If 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 maintain vat records, you still need to ensure 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 from the EU have shifted their tax system on services and goods 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 are a trader in the UK then you certainly may have converted into a vat registered trader once your taxable sales might 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 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 which will need to be mentioned in each vat invoice that you will now be needed 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 goods or services from vat registered traders then you will also need to see if their invoices too follow the same format as per hmrc vat.

In addition, 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 your government. Your vat returns will have to give a summary for vat paid on purchases and vat collected on taxable sales. For those who like to go into 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 and this should help 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 highly relevant to your enterprise. In case you deal in services or goods that attract reduced vat rates, zero vat rates, or are vat exempt then you will also need to clearly specify the classification of such goods or services within 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 require specific techniques to maintain the required records.

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