What constitutes proper records for VAT?

If you are VAT registered, then you need to be aware of the minimum record keeping requirements! Proper VAT records include: <ul> <li>a record of sales and purchases, and  </li> <li>a separate VAT account. </li> </ul> Generally, a business must keep VAT business records for at least 6 years (or 10 years if they use the VAT MOSS service). By special permission, HMRC may allow you to keep some records for a shorter period. For example, if the 6-year rule causes you serious storage problems or undue expense. The VAT records can be held on paper, electronically or as part of a software program. There are no specific VAT rules about using a computer. Records used for other tax purposes may need to be kept for longer periods. There are financial penalties that can be levied for a failure to keep or produce the VAT records required by law. Planning note: Regarding the issue of a VAT sales invoice: There is no requirement to issue a VAT invoice for retail supplies to unregistered businesses unless the customer requests a VAT receipt. A simplified VAT invoice can be used for supplies of up to £250. There are also specific situations where a VAT invoice does not have to be issued, for example if your customer operates a self-billing arrangement.