[Latest Accounting Platform] Managing VAT

CharlotteCharlotte Member Posts: 695 admin

Hi! If you’re reading this post, you may already use Wave, or you might be evaluating Wave for your small business and you need to be sure it will meet your requirements for reporting under MTD. If you are unsure which version of this information is applicable to you, please click here.

You are likely already aware that HMRC is introducing new VAT reporting requirements under its Making Tax Digital (MTD) programme.

As a Wave customer in the UK:

If your business is VAT registered, with a taxable annual turnover above £85,000, you must submit your VAT100 reports digitally, beginning with the return for your first VAT period that commences on or after April 1st.

If your business operates on standard quarterly VAT reporting, the deadline to submit VAT under MTD is August 7th. That’s 1 month and 7 days after the end of the April-June quarter, which runs from April 1st to June 30th, and is the first quarter covered by MTD.

You can submit your VAT return for this quarter any time between June 30th and August 7th.

Over the course of the next few days, we’ll be rolling out a new VAT100 report. When it is available in your account, you will find it under Reports in the left-hand navigation menu. This new functionality helps you comply with the digital filing element of MTD.

The VAT100 report will allow you to export your data to a spreadsheet, which you can then upload to approved bridging software in order to file your return.

We hope you’re already feeling confident, but just to be sure, we’ve prepared additional documentation to guide you through this process. We’ve put together an overview of how to set up Wave to accurately track VAT and make use of the VAT100 report. You’re also welcome and encouraged to ask any questions you have in this discussion.

@Paul_CloudBook @MerlinAccounts_UK because you’ve been very active (we appreciate it!) I’d like to give you a heads up regarding this change. Please let me know if you have any questions.

edited April 1, 2019 in Making Tax Digital


  • YorkieYorkie Member Posts: 2

    Will this be a gradual roll out? Still no sign of VAT100 Report on my system. - April 5th

    Thanks in anticipation..

  • SamdSamd Administrator Posts: 557 admin

    Hey @Yorkie, this was (literally) just released. You should receive communications about this and see the report in your Wave account now, but you can also head over to our help guide here to learn more!

  • CageyCagey Member Posts: 1

    It is there now, but doesn’t seem to work for me - the box 4 (vat on purchases) is different from the vat total in the transactions report - and therefore wrong.

  • Mags123_45Mags123_45 Member Posts: 1

    Will there be a cash and cash equivalents version of this report?

  • MerlinAccounts_UKMerlinAccounts_UK Member Posts: 177 ✭✭✭

    Any UK users needing support from a UK Wave accountant, especially in matters surrounding VAT returns (but also payroll, accounts, tax too) feel free to get in touch. Happy to do a bit of ad hoc work or provide a full on service.

    As the VAT reporting is a new Wave feature would be happy to be made a collaborator with one or two users to have a closer look at how this is working and identify niggles to help Wave tweak where possible to make it work better for the benefit of all UK users.

  • UbergeeksovUbergeeksov Member Posts: 10


    Are you able to explain how I set the starting balance for Sales Tax (in my case VAT)?

    I started using Wave from 1.1.19. My VAT quarter started on 1.1.19.

    As at 1.1.19 I owed HMRC £X.XX in VAT (from the VAT quarter 1.10.18 to 31.12.18).

    In mid-February I made a payment to HMRC of £X.XX.

    When I produce a Sales Tax report (for 1.1.19 to 31.3.19) it tells me that the starting balance is £0.00, that the net tax owing is £Y.YY, that I have made payments of £X.XX, and the amount owing is £Y.YY - £X.XX. This final figure is wrong, because the starting balance is wrong.

    How do I adjust the starting balance to £X.XX (liability)?


  • MerlinAccounts_UKMerlinAccounts_UK Member Posts: 177 ✭✭✭


    It sounds like you may not have set up your opening balances correctly when you transferred onto Wave BUT your opening balance on the VAT liability account should be the same as the amount you paid to HMRC in February as that was the VAT that was due on the quarter ended 31 December 2018.

    You need to amend your opening balance entries by crediting the VAT liability account and debiting your capital account.

    Hope this helps

  • CommitteeCommittee Member Posts: 3
    edited April 25, 2019
  • CommitteeCommittee Member Posts: 3

    After we export the report, what does ‘upload using approved bridging software’ mean? Our accountant is telling us that we have to switch over to Xero despite the VAT100 addition by Wave. Is this true? If not, what’s the alternative?

    edited April 25, 2019
  • JamieDJamieD Administrator Posts: 1,145 admin

    Hey @Committee! As of right now, Wave currently does not have the licenses/ability to directly communicate with HMRC so we need a partner to bridge that gap (aka a bridging software allows the user to export a report from Wave and upload that report directly to the HMRC). I just thought I would also give you a bit of information regarding what bridging software actually does in this specific case;

    • You can use the report you export from Wave
    • Just tell the software which cells refer to which VAT100 box and it’ll submit for you
    • You’re allowed to link out to Tax Optimiser or Vital Tax since we have it on our help centre. They have helpful easy to follow demo videos on their sites. (https://vitaltax.uk) (https://taxoptimiser.co.uk)

    I do realize that this help centre article goes into a bit of lengthy detail, but it will be worth the read for your future understanding of how all of this works within our software; https://support.waveapps.com/hc/en-us/articles/360025763412--UK-Prepare-your-VAT-return

  • MerlinAccounts_UKMerlinAccounts_UK Member Posts: 177 ✭✭✭

    @Committee said:
    What does ‘approved bridging software’ mean? Our accountant is telling us that we have to switch over to Xero despite the VAT100 addition by Wave. Is this true?


    You aren't obliged to switch to Xero or anywhere else at present, Wave have adapted their reporting features to enable you to generate the raw data you need for the VAT100 return in a format that can be linked easily to bridging software - I for one have been extolling VitalTax for this purpose as they are offering a free service for the first 12 months. Of course if your turnover is below the VAT registration threshold then MTD for VAT isn't even relevant to you.

    MTD for tax is the next stage of HMRC's switch to digital filing BUT as yet I've seen nothing concrete on its implementation, though it is meant to be introduced from 6 April next year (wait and see though!).

    If you really do feel the need to switch you could save yourself a lot of money (comparing prices to Xero) by opting for Pandle, which again is cloud based and has similar (bit not all) of the Wave features.

    edited April 25, 2019
  • CommitteeCommittee Member Posts: 3

    Thank you for your replies @JamieD and @MerlinAccounts_UK!

  • JOHNRJOHNR Member Posts: 4

    Hi Guys
    How do I enter import VAT so that it ends up on my VAT return and is recoverable. I often pay this to HMRC FAS 2 or 3 months after I pay for my products.

  • JamieDJamieD Administrator Posts: 1,145 admin

    Hey @JOHNR. I just wanted to confirm with you here -- are you referring to importing your details of taxes on transactions (VAT)? Just need a bit of clarity around your question so I can best advise you on what needs to be done here.

  • HeyGuysHeyGuys Member Posts: 1

    @JamieD I have a similar question to JohnR.

    How do you include VAT on deposits in transactions, much like you would do on withdrawals, where the you select "include sales tax"?

    I can not seem to find an option for deposits or would I need to split a deposit and add a category called VAT to capture VAT correctly?

    I have tried the above option, but because our invoices go out with VAT inclusive, balancing the deposit correctly doesn't seem to work properly, well for me at least.

    Assistance would be appreciated!

  • MerlinAccounts_UKMerlinAccounts_UK Member Posts: 177 ✭✭✭

    @JamieD said:
    Hey @JOHNR. I just wanted to confirm with you here -- are you referring to importing your details of taxes on transactions (VAT)? Just need a bit of clarity around your question so I can best advise you on what needs to be done here.

    This is VAT paid directly to HMRC on goods imported into the UK, the VAT itself isn't levied by the supplier, though it does of course relate to the value of those goods. So when @JOHNR says import he is referring to the VAT charged on his imports by HMRC. Hope that clarifies @JamieD

  • JOHNRJOHNR Member Posts: 4

    That is exactly what I meant thank you for clarifying for me
    Regards John

  • MerlinAccounts_UKMerlinAccounts_UK Member Posts: 177 ✭✭✭


    Not wanting to jump in when @JamieD has said he will research this for you BUT to me the obvious way to do this would be to enter your payment of the Import VAT charge to HMRC as being for a purchase of goods (for example), and then enter the same amount as being the recoverable sales tax value. That should work.

  • JOHNRJOHNR Member Posts: 4

    Andrew tested that and it is the perfect solution. Thank You

  • ValkyrieValkyrie Member Posts: 3

    In the new VAT reporting when you select the Qtr dates to see what is due to allow you to export to a bridging software it now shows a rolling balance of unpaid VAT from the previous months. How can I show this as recorded payments - it is already listed in the transaction logs as a tax payment

  • ConnorMConnorM Member, Administrator Posts: 1,175 admin

    Hey @Valkyrie! Just to confirm here, you're seeing transactions that account for those VAT payments in your account, but they're not reflecting in that VAT reporting? Can you send me screenshots here showcasing this? Would love to get a further idea on what you're seeing.

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