Estonian VAT
System
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This discussion was created from comments split from: Making Tax Digital (MTD): Digital record-keeping and filing in the UK.
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Hello,
I'm struggling with getting the numbers match on my bookkeeping for 2018 and I suspect it is because during the year I stopped being liable to paying VAT. I bought an asset (computer) when I was still obligated to pay VAT and hence the government refunded the VAT I paid for this. After changing to not being obligated to pay VAT, I had to pay back the VAT that was left after depreciation. I have a feeling that the difference between the amounts before and after depreciation may have something to do with the issue. I have recorded all VAT payments correctly under Transactions including the last VAT payment to the government, but for some reason the Sales Tax report still shows that I owe some tax to the government. I have also followed the guidelines for adding journal transactions regarding depreciation, that did not change the report. Is there anything else that could be the reason for these numbers not adding up in Wave?
@Mari_PA1 Thanks for jumping into the Wave Community Forum and we are happy to have you!
By no means am I well versed in UK Tax requirements, however, I'm sure that any others here using the VAT report may be able to chime in. Before being able to speculate on what the best course of action may be, I'm curious if you can describe the process that you used to track the sales tax on transactions within Wave? The reason that I ask, is that the VAT or Sales Tax reports in Wave rely upon you adding the Sales Tax to all invoices, transactions and bills in order to be accurate. You do this through creating the Sales Tax in the Settings Tab. Can you confirm if you have completed this step?
@JordanFromWave Hi Jordan, thanks for your response.
I'm not sure how my post ended up in this thread, as it does not have anything to do with UK Tax requirements. My company is actually based in Estonia, but nevertheless I suppose in most countries there is a certain limit of income you can get without having to add VAT to your invoices, so perhaps someone here has been in a similar situation.
I have added Sales tax/VAT to each invoice, bill and transaction in Wave during the period my company was registered as liable to paying VAT. After that period I stopped adding the VAT anywhere just as before, because it should not be added on my invoices anymore and cannot be deducted from my expenses either. So yes, I can confirm that I have completed this step to the best of my knowledge.
Does this help you to make more sense of this?
@Mari_PA1 I had initially merged this post into an ongoing thread, as it sounded similar to another one. I've moved it here so we can investigate it together. Based off of what you have explained, it sounds like you have completed the correct steps in terms of adding the VAT to the applicable transactions - so that's a good first step.
In terms of the specifics of how to manage the VAT returns and depreciation, that is something that sounds pretty specific to your business. While I would love to help with that, as I'm not an accountant, nor do I know much about the business actions that your company functions through, it sounds like consulting an accountant or accounting professional on the correct practices of how to address this specific issue.
Once you have gotten an understanding of if the way that you have handled the VAT step correctly (mainly in terms of the steps taken in regards to depreciation), I would be happy to confirm if the reporting in Wave is working as expected. Typically, the report will pull the data from the Transactions page, which is why I think that this could be related to the workflow that you have used to this point.