VAT is a tax charged on most business-to-business and business-to-consumer transactions in the UK.

If you are a VAT registered business, VAT is a tax on the net value added to your products or services – the difference between the value of your sales and the value of your purchases.

If you are a non VAT registered businesses or organisation, or a consumer, VAT is a tax on your consumption.

If you are registered for VAT, you must keep certain business records and VAT records of your sales and purchases. You must also keep a separate VAT account.

There is no set way of keeping these records and accounts. In most cases, they can be easily adapted from your normal business records. The main thing is to ensure that they are complete and up to date and that it is easy for VAT officers to access them when you have a VAT inspection.

At the end of each VAT period – usually every three months – you need to fill in a VAT return. A VAT return tells HM Revenue & Customs (HMRC) how much VAT you charged to your customers, how much VAT you paid to your suppliers – and the amount of VAT you must pay to HMRC or the amount of VAT you can reclaim from HMRC.

SLH & Co. | Bookkeeper Surrey can help in putting a system in place to ensure that all records are kept correctly. Not only will this help to prevent errors in filing your returns, but will also be of benefit should you be inspected.

If you are unsure about which records need to be kept, more information can be found on www.hmrc.gov.uk or contact us for a free initial consultation.

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