The Future of Making Tax Digital at Wave
To allow our UK users to comply with MTD requirements, Wave introduced a VAT100 report in Spring of 2019 that allows Wave users to file using compliant bridging software.
Wave will not continue building further technology to support MTD in the UK beyond 2020. This means Wave will not comply with MTD requirements for income tax filing (slated for 2021), and will not build support beyond the existing VAT 100 report.
Is support for filing my Wave VAT100 report for MTD using bridging software going away?
At this time, HMRC (Her Majesty’s Revenue & Customs) has not indicated a limit to how long bridging software for VAT reporting will be acceptable. Until HMRC changes their stance on the acceptability of using bridging software, Wave's VAT100 report will continue to enable you to file under MTD rules.
Will Wave be MTD compliant for income tax?
Eventually, MTD will be extended to income tax filing for all UK taxpayers. According to ICAEW (the Institute of Chartered Accountants of England and Wales), this will take effect no earlier than 2021. Because the detailed requirements of MTD for income tax—including whether the use of bridging software will be allowed—are unknown, we cannot confirm if UK taxpayers will be able to comply with MTD for income tax while using Wave.
At this time, Wave is not committing to invest in further software changes to support MTD for income tax. Because of this, we advise that Wave customers who require certainty that their accounting software will support MTD for income tax should plan to migrate to a new software before the end of 2020.
Who does this impact?
Making Tax Digital is an initiative being carried out by the UK's revenue agency, HMRC. Under this new initiative, there are two obligations for all UK businesses that currently make over £85,000 in sales per year:
- You must store your financial records digitally
- You must file and submit your VAT tax return digitally
If you are not VAT registered or your business does not make over £85,000 in sales per year, you are not required by HMRC to file VAT digitally. If you're unsure about whether you meet the requirements to file digitally, we encourage you to reach out to your professional tax accountant.
How do I get my data so I can take it elsewhere?
You can export your Wave accounting data by going to Settings > Data Export.
You can also export any of the reports from your Wave account. To export your detailed General Ledger go to Reports > Account Transactions (or General Ledger > Details on the legacy platform).
What does this mean for Wave's other free software?
There are no changes to the availability or functionality of any of Wave's other features. We know that Wave's free features offer incredible value to small business owners around the World. We'll continue to offer and improve our free invoicing and payments processing integration with Stripe in regions we currently support.
Does this change apply to payments processing with Stripe?
This does not impact Wave's integration with Stripe for payments processing.
I'd be willing to pay for these services, would you build it then?
Right now, the operational & technology costs of complying with these regulations in the EU and UK is not the right business decision for us.
In order to ensure that we are able to make feature investments while keeping our accounting and invoicing platforms free for users worldwide, we will continue to focus on growing our business in North America through our paid services in that region.
Is there any way to opt out of this?
No, there is no way to opt out of this change.
Are you doing this because the UK/EU isn't generating revenue?
Wave’s primary revenue comes from financial services based in North America. As we continue to evolve our international strategy in the future, the United Kingdom and European Union will be a critical component of that vision.