FAQ: Why is the Value Added Tax (VAT) on my bill 1p or 2p different to what I’d expect?

You might find that your bill’s calculation of VAT is 1p or 2p different to what you’d expect. This is because your charges are rounded to the nearest penny, but VAT is calculated based on unrounded charges. These charges are driven by your unit rates per cubic meter of consumption. Wave’s unit rates are to 4 decimal places, and these are based on the wholesale charges Wave incurs.

Can Wave re-issue my bill with the VAT value I’d expect?

As VAT is calculated by Wave’s billing system using the mechanism described above, bills cannot be re-issued to display a different value of VAT.

Is this an issue for my VAT return?

If you’re a business registered for VAT this shouldn’t be an issue. Wave’s output VAT will equal the input VAT recorded by you when processing Wave’s invoice, meaning there is no impact on the overall passthrough of VAT.