07 Dec VAT Record Keeping
A VAT Registered business must issue VAT invoices. These rules are for businesses which don’t use the VAT Margin Scheme.
Valid invoices must be on paper, or issued electronically. You must keep a record of the invoices issued, even if you write one out by mistake, or you cancel one.
You can’t claim VAT using an invalid invoice, a pro-forma invoice or, a delivery note. Your accountant will be able to advise you about VAT records. If you need any help then contact as they have an experienced team who will be able to guide you.
There are three types of VAT invoices. A full invoice is used for most transactions. Then there is a Modified Invoice which can be used for retail supplies over £250 and a simplified invoice for retail and other supplies under £250.
You will have to ensure that the invoices show the correct information. A Full Invoice does not need to show the total amount including VAT and a Simplified Invoice only needs half the information that a full or a modified invoice needs.
Business users who don’t have to issue VAT Invoices are:
If you operate a self-billing arrangement
If you give goods as a gift
If you sell goods under the second hand margin scheme
Your invoice is only for zero rated or exempt goods within the UK
Retailers don’t have to issue their customers with receipts, but they must keep a copy if they do issue one. A simplified receipt will suffice for goods under £250.
Here is a list of some of the VAT records which you must keep:
General business records such as bank statements, cheque stubs, till rolls and cash books
Copies of invoices you issue
Originals of invoices you receive
Debit and credit notes
Records of any goods you have gifted, that are zero rated or exempt and goods that you can’t reclaim the VAT
A VAT account
A VAT Account is a record of the VAT you pay on any purchases you make and the VAT you charge on the goods you sell. This is what you use to complete your VAT return.
It must contain:
Your total VAT sales and purchases
The amount of VAT you owe HMRC
The amount of VAT you can reclaim
The VAT on any EU purchases or sales
The flat rate percentage and turnover if you are using the VAT Flat Rate Scheme
Any errors or bad debts must also be recorded.
If you would like any help or advice regarding VAT or any other tax matters, SQK Accountancy in Manchester, provide a friendly service at a competitive price. Have a look at the website for further details or contact us through the website or by telephone on 020 8798 0657.