Keeping a record of all your sales and VAT is a requirement for any business owner. In the UK HM Revenue & Customs could ask for records as far back as 6 years when conducting an audit. For business owners it can get difficult keeping historical sales and VAT records manually.
To do this manually it involves compiling summary reports and applying the correct VAT rate for each transaction. Some items may be zero-rated or have reduced VAT rates.
Common VAT Scenarios & Issues.
- You may be entitled to a VAT reclaim or might have underpaid VAT in the past.
- If your selling goods outside the EU, VAT is zero 0% but you might still be paying 20% VAT on those sales without knowing, which is incorrect.
- You may have missed a threshold and now owe VAT to a specific country you have been selling to.
VAT Penalties and Surcharges.
Failure to pay VAT can result in a surcharge dependant on the amount of times you default within a 12 month period. If there are errors on your VAT return you can reduce the penalty by voluntarily disclosing the error to HMRC. The penalty can be up to 30% if you have been careless or failed to send in a return or can be up to 100% if the error was deliberate and purposely inaccurate!
Cross Border VAT Software will provide you access to your historical VAT/Sales records and reports.
This key feature saves many of our business owners significant time and effort whilst providing them more opportunities to focus on their business needs. CBV lets you go as far back as to when your business began so you can track your sales journey and see which months were greater then others.
Below you can see part of the CBV dashboard where you can view a sales graph and below it is the drop down menu which allows you to select the particular month or quarter for any previous years.
Calculate VAT correctly
The 5 transactional micro figures you would need to accurately calculate your VAT are:
- Sale/Shipping amount in correct currency
- Associated Fees Breakdown
- Shipping Origin and Shipping destination
- Sold SKU/Item Description
- Date of sale
For more information click here…
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