VAT Record Keeping

VAT record keeping can be very simple, if you follow a few simple rules and good housekeeping.
When keeping business records, you should remember that special rules apply for VAT records, such as VAT invoices and a VAT account.

Invoices to Customers:

All invoices given to other VAT registered parties must be VAT invoices. VAT invoices must include the following:
• Your business details, your customer’s details
• Your VAT Number
• Details of all goods or services provided
• The price of each item before VAT
• The VAT rate for each good/service
• The total price including VAT

If a VAT invoice is lost, you may ask the supplier to provide a replacement, though it must be marked “Duplicate”.

Invoices and Receipts from Suppliers:

If you receive an invoice or a receipt and pay VAT on the goods or services, be sure that you have received a VAT invoice from your supplier. This invoice will need to have the same information on it as an invoice you would provide to your customers.

VAT Account:

These VAT invoices will help you create your VAT account, which is simply a record of all VAT collected, and all VAT paid to other parties. There is no standard format for VAT accounts, but they should include the individual items that VAT was paid on, both incoming and outgoing, and the clearly marked difference between the two sums.
HMRC requires that VAT accounts be accurate, complete, and readable, or you may face a fine. Though even without the fine, keeping an easily understood and complete VAT account makes filing VAT returns simple.
All VAT records need to be kept for at least 6 years, and 10 if you are supplying digital services in the EU, and are using VAT MOSS.

How We Can Help:

At Optimum Office, we can take on the VAT record keeping and reporting burden for you. Have a look at our VAT Reporting Service.

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