Bookkeeping For VAT: The Do’s & Dont’s

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Keeping Proper Records

Invoices

Since 2011 HMRC have been on a mission to ensure that ‘proper books and records’ are kept by businesses.

The days of throwing your receipts into a carrier bag are (or should be) over.

As a VAT registered business you have a responsibility to keep copies of your sales and purchase invoices and a breakdown showing where the figures for each VAT return have come from.

Last week I met someone who told me that she refused to keep her records in a neat fashion as she was hoping for a VAT inspection and could therefore cause the inspector a lot of hassle trying to find everything.

This is definitely not advisable.

You can be fined if your documents aren’t kept in good order, easy to find and referenced properly.

Invoicing Correctly

VAT registered businesses have to make sure that their sales invoices show the following:

  • VAT registration number
  • The date and tax point if different from the date
  • The VAT rate
  • Unique invoice number which follows on from the last invoice
  • Your name, trading name and address
  • Description of the goods
  • Total amount of VAT charged
  • Buyers name and address
  • Details of any cash discount

    • Keep The Records

    You have to keep all records for 6 years so make sure you don’t throw anything away before this time.

    Obviously this can start to take up a lot of room and there may be storage costs associated with this.

    You can actually keep the records electronically as long as they are still easy to locate. So why not get them scanned in and converted to PDF so you can get rid of the originals and get your loft space back?

    If you are thinking of updating your bookkeeping system then why not try Cloud Accounting? Read what I have to say on the subject here.

    Vikki

    Did You Know
    Striped Leopard provide a bookkeeping service for our clients so that they don’t have to worry about getting it wrong.
    To find out how we can help you then please contact us.