[UK] Set up Wave to track VAT
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[UK] Set up Wave to track VAT
Disclaimer
The explanations and advice in this article are based on Wave’s understanding of relevant HMRC publications. While we’ve taken reasonable care in researching and preparing this article, ...
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Hi,
Thanks for this post, very helpful.
For some reason the Taxable Amount is showing as zero in Reports for EC Services - Zero rate (standard rate is showing fine) Any idea why?
I also trade (services) with businesses based in non EU countries where VAT should be zero rated, how should I go about this?
Thank you!
Hey @patpending74 ! If possible, could you please include a few screenshots here --one of the example transactions with the tax applied, as well as the tax settings page just to make sure that everything is setup correctly .. this would be super helpful in determining what exactly is going on here.
Hi @JamieD
Thanks for getting back to me.
My mistake I had the dates set incorrectly!
The second part of my question still stands though:
I also trade (services) with businesses based in non EU countries where VAT should be zero rated, how should I go about this?
Thanks you,
Mark
How do I record VAT I have paid for imports so that it is recorded on the VAT report and reclaimed.
Thanks
John Russell
Hey @patpending74 - you should still be able to go about this the way you would adding a regular sales tax. You'd just head to Settings > Sales Taxes, and generate a non-EU tax rated zero, which you could apply to the relevant transactions.
@JOHNR You should be able to apply this tax to the expense transactions associated with these imports, which should offset the amount owed by the amount which you're claiming. Let me know if this gives you any trouble though or the reports don't appear to calculate appropriately.
How do I set up a flat rate VAT scheme? I have to show VAT of 20% on invoices, but I only have to pass on 11% to HMRC.
Hey @simons, If I understand correctly, you are collecting VAT at a 20% rate, but you are only required to remit 11% of the total amount you collect. If so you will need to set up VAT at a 20% rate, and apply that to relevant invoices. On your books, your total VAT liability will include the amounts that you have collected at the 20% rate, but you won’t have to pay all of that. Once you figure out what 11% VAT would’ve been (as in, once you know how much you actually need to remit under an 11% VAT rate), you can record the remittance by categorizing the remittance against the VAT liability. This won’t fully clear out the VAT liability though, so you'll then need to add in an adjustment where you debit VAT liability to zero out the balance, and credit “VAT Flat Rate” income category (if you don’t have this category, you can add it in) for the same amount.
I hope that helps and as always we highly recommend reaching out to your accountant for advice on these things too!
Is their an option for tax used in the MOSS scheme? e.g. Selling digital goods to EU.
Hey @benny_sze . There is no option for tax used in the MOSS scheme. My best advice would be to consult your accountant to see how to handle this with either workarounds, or with a different system.
I'd be inclined to say that you mark the 20% vat (sales tax) as non recoverable, and then just total up your gross sales for the quarter, apply the FRS rate, and then journal that as a credit to the VAT liability account and as a debit to your Profit/Loss account - I suggest you create an account called Flat Rate VAT perhaps as an expense. When you settle with HMRC you categorise the payment to the liability account you credited the liability to.
For MTD for VAT reporting you could actually set up a spreadsheet to show your calculation of your vat and then use bridging software linked to this to file your return.
I'm not wholly certain of a way that we can get the VAT 100 reports to work correctly within Wave to achieve this, but if I think of how I'll let you kknow.
In India we need to charge 2 different vat (CGST 6% AND SGST 6 &) in a single bill. However in wave you gave only 1 vat field. How do we setup 2nd field?
Hi @SystemGuy! You can add taxes from: Settings > Sales Tax in your Wave account and apply these taxes to your bills or invoices. I have included an example for adding more than one tax to an item on an invoice below, but you can do the same on a bill!
Hi all.
So I've submitted my VAT return and have received a refund. Let's say it's £100. Can someone please walk me through how I record this in Wave?
Hey there @covflyer
When you create an income in your transactions page, our system has an automated Sales Tax Refund from the Government. See my image below!
Let us know if you have any issues with this!
Thanks! It works!
@BarsinA, I'm following your instructions below on categorizing a VAT refund a transaction as a Sales Tax Refund from the Government. However when I click on the circled option several accounts are listed since I've set these up as per article on setting up Wave to track VAT.
Am I correct in assuming that I should assign the standard rate VAT account to this transaction?
Hi @EmuGriff! Thanks for reaching out. After looking at the Help Center article on how to set up your VAT it would look like the standard rate would be the one to select. However, if you do know the specifics of the refund you can split the transaction and categorize each split line to as a refund and then select the corresponding tax.
Hello. Do you set the 0% rates, including EU 0%, as recoverable or non recoverable? Thanks.
Hey @IMc
Not sure if you've checked out our other article on tracking VAT on sales, but have a read here! Also if you have an accountant who is able to answer any of your questions that would be advised!
https://support.waveapps.com/hc/en-us/articles/360026052751--UK-How-to-track-VAT-on-sales-and-purchases