I am a sole trader with a small retail business. In 2011 I was de registered for VAT as my turnover was under threshold (E75K? - is this the limit?). A book-keeper told me I was entering the VAT on purchases incorrectly on the Big Red Book software package. Apparently, it should be entered at 0% for both resale and non resale purchases, so the full cost of the product is calculated correctly for resale.
Also Purchases from the UK into Ireland are charged at 20% UK VAT, should I calculate the VAT as 23% for purposes of resale or enter them at 0% also?
Why, if I am de-registered do I need to calculate the VAT? Could I not just keep the invoices as proof of VAT payment or does Revenue need to see what potential VAT I am paying on my accounts? Since 2011 I have entered the cash sales as 'Non applicable' under the VAT column, would not this apply to the purchases also?
I have read the ROS.ie online information pages but cannot seem to locate the answers to the above questions. Does anybody know the correct way of entering the data?
Advice welcome.