Value Added Tax (VAT) may be a consumption Tax applied on an honest as its value is increased each stage of its production or distribution. it’s an tax that’s associated with a Taxpayer’s consumption and not their income. The VAT is applicable in additional than 160 countries. VAT, at the speed of fifty , already introduced within the UK and other GCC countries from last past year.
What VAT records do you need to keep?
You must keep a VAT account which may be a record of how you’ve got calculated the figures you submitted on each of your VAT returns. This account will show every transaction on which you’ve got charged VAT and each transaction on which you’ve got reclaimed VAT also as those purchases which are reduced rate, zero rated or exempt from VAT. It must also include EC Sales and EC Acquisitions also as reverse charge transactions.
You must have a replica of each VAT invoice issued by your business. Your VAT invoice must contain certain information. Read our blog on what you ought to include on your invoice.
If you’re a retailer you are doing not need to issue an invoice for sales under £250 unless the customer asks for one.
You must have the first VAT invoice or receipt (or other evidence) for every purchase you’ve got reclaimed VAT on also as those which are zero-rated, exempt or reduced rate. If it’s illegible or lost you ought to invite a replica . you can’t reclaim VAT on a proforma invoice, a delivery note or a press release.
You must have a replica of each credit note or other document which has altered the worth of the availability.
- Cheque book stubs (completed with the payment information,
- Paying in slips
- Bank and mastercard statements
- Till receipts
Invoices, credit notes, receipts and other proof of purchase are often stored in paper or digital format. Your evidence must be easily accessible in order that you’ll find specific documents when the VAT Inspector asks to ascertain them.
Keep your paperwork tidy and organized in order that you’ll find what you would like . If you’ve got a VAT inspection the VAT Inspector is probably going to spend less time asking you to supply receipts if he or she will see that you simply can find them easily. If your paperwork is disorganized it’ll give the impression that your VAT accounts could also be inaccurate in order that they will spend longer browsing everything with you.
Accounts software makes maintaining and producing a VAT account far more straightforward but, like anything, the return you produce is merely nearly as good because the information you enter. Know what purchases you’ll claim VAT on, which are zero rated and which are exempt. Whilst some transactions will have VAT thereon doesn’t suggest that your business can claim the VAT. And remember to not claim VAT on any items which are Outside the Scope of VAT – VAT payments, tax payments, wages payments, etc. I even have seen it done!
This why you need UK vat specialist as experienced as Rayvat-UK to handle your VAT process and improve your VAT situation. By using our VAT outsourcing services, you’ll enjoy a list of benefits, including lower cost, time efficiency, and most highly – better control over VAT liabilities.
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Download Free Value Added Tax (VAT) Invoice Template