The Future of Making Tax Digital at Wave
Katie_Wave
Administrator, Moderator Posts: 24 admin
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.
Comments
Can I check with you as I have just received an e-mail which is difficult to ascertain whether it has come from wave mentioning that uk users will no longer be able to make bank connections from September. Is this genuine and is there further information
Hey @toland
We've created a separate FAQ all about Open Banking, and Wave's decision not to become compliant. You can check that out and join the discussion here: https://community.waveapps.com/discussion/5165/changes-to-bank-connections-in-the-uk-eu#latest
Will you be still running the software in uk has I am not vat registered?
Mark
And will be still upload bank still ?
Mark
MTD for VAT has no bearing for you. However MTD for Income Tax might, though as yet details aren't known - HMRC currently aim to (maybe) implement this from 6 April 2021.
The bank connection finishes in September, and this could be problematic if you have a lot of bank activity, but importing through CSV uploads should still be more streamlined than manual entry. Low volume bank activity may be easy to input manually and have only a small time impact on you.
This is really not funny has wave has just been purchased and it’s a very good software but free that its pulling away from us small businesses why am not surprised .
Hello Wavers
Here is my solution. Yesterday I set up Pandle Pro which is £6 a month. They have a free version which does not support bank feeds. Pandle is UK based and will be MTD compliant. There are other advantages too including immediate chat box support. Pandle treats Stripe as a bank and imports all Stripe connections which means you don't have to have multiple Stripe accounts as I did for non-Wave payments. They have an invoicing feature similar to Wave but you have to email the customer and cannot input the card details yourself as you can with Wave. I am a veteran of Xero, Quickbooks, and Wave but it took me most of the day to set up Pandle. I set it up from my year start of 1/4/19 and had to re-categorise a couple of months of transactions. I felt it was worth the time to do that now.
Going forward I will use Pandle for bookkeeping and still use Wave for invoicing because I like to have the customer read out their card whilst I type it in. Sending an email would lead to more reminders and possible bad debts.
You can try Pandle Pro free for two weeks. I think its going to be good. From my previous experience Xero is excellnt but over engineered for micro businesses. Quickbooks I would not bother with. Wave was fabulous but its the reality of the tech world that investors are more inportant than customers.
Happy accounting
Gwyneth
Hi. I'm in the UK and I currently use the Stripe integration with Wave to allow my customers to pay via card using an invoice generated by Wave,
I've just received an email from Stripe saying that because of the new regulations coming in September 14th this year for Strong Customer Authentication (SCA) that some of my payments might get declined, It advises me instead to create my invoices in the Stripe Dashboard to collect the payments.
Please can Wave confirm if I will still be able to successfully invoice my customers using Wave invoicing and be paid by card using Stripe after September 14th as I currently do?
I was lead to believe from reading Wave's Q+A on the upcoming Open Banking regulation changes in the EU that only MTD would not be supported, meaning bank connections would be severed.
Thank you.
Paul
Hey @paulstanford . We're currently working on the SCA Compliance situation with the team. We will let the community know when we have further updates on it.
Hi, do you have an update on the SCA compliance with stripe please? I need to know whethher to stick with Wave or plan on moving elsewhere.
Thanks
Hi @mehball , thank you for checking back in on this. SCA compliance is something that we're actively working on. Further updates on this will be available in the future. The team is working on integrating Stripe's latest API to be compliant.
Hi
I'm trying to export my VAT100 report, but when I select the dates I need for my VAT return (1st April - 30th June) it doesn't seem to calculate the right sales amounts..please can anybody advise/help?
thanks
Hey there @AdrianMarciante_1
Unfortunately I don't really have the insight into whether you've correctly applied the proper tax to your transactions. But first things first, you'll want sift through your transactions in your transactions page by date and make sure that you've applied the proper VAT tax, and make sure that it was set to recoverable:
This would be the best place to start. Let us know if you have any questions and do check out these articles below if you haven't already!
https://support.waveapps.com/hc/en-us/articles/360026050831--UK-Set-up-Wave-to-track-VAT
https://support.waveapps.com/hc/en-us/articles/360025763412--UK-Prepare-your-VAT-return