How do I record Gift Aid income from HMRC? (claimed within ExpensePlus and auto-accrued)
This article explains how to record Gift Aid income in ExpensePlus where:
- When creating accounts on an accruals basis (and auto accruals are enabled)
- When creating Gift Aid claims within ExpensePlus
Note: Where auto-accruals are disabled, or Gift Aid is claimed outside of ExpensePlus, please see this separate support article.
In this article:
Claiming Gift Aid
When claiming Gift Aid, ExpensePlus creates separate claims for each fund, making it easy to allocate payments from HMRC to the correct fund.
Good to know: Where restricted donations are given, as well as the donation needing to be recorded to the restricted fund that it relates to, any Gift Aid also needs to be recorded to the same restricted fund (unless the donor has specified otherwise).
How often should I claim Gift Aid?
Some organisations claim Gift Aid monthly, quarterly or yearly. Whilst the frequency you claim Gift Aid is up to you, the process within ExpensePlus is super straightforward.
We would recommend claiming Gift Aid monthly (once the transactions for the previous month have been reconciled), and this is typically what most churches and charities do.
Top Tip: Gift Aid often accounts for a significant part of an organisation's income. Claiming Gift Aid monthly not only helps with cash flow, but it keeps both budgeting and reporting straightforward.
Typically, GASDS is either claimed monthly as well, or annually at the end of the tax year - again, the frequency is up to you.
Note: ExpensePlus only allows each donation to be part of one Gift Aid claim, regardless of the frequency at which Gift Aid is claimed.
Accruing Gift Aid Income
Note: if you create accounts on a receipts and payments basis, skip to the next section (as this section isn't relevant for your charity).
Where auto-accruals are enabled, ExpensePlus will automatically accrue Gift Aid income for you as part of the process flow for submitting a Gift Aid claim (see the pop-up shown below).
The accrual date in the pop-up will default based on the last date of donation within the claim, but this can be custom-set.
Good to know: When creating accounts on an accruals basis, Gift Aid is typically accrued to the date the donations were given (rather than the date that the money was claimed, or received from HMRC).
Gift Aid income will automatically accrue based on the date set, and the accrual will be shown on the balance sheet.
Reconciling Auto-Accrued Gift Aid Income
Where Gift Aid has been auto-accrued, it's important when reconciling HMRC Gift Aid income to use the income type of 'Gift Aid Claim', then simply select the Gift Aid claim the income relates to.
If any interest has been added by HMRC, you can allocate this amount within the same pop-up.
Important: Where Gift Aid has been auto-accrued, it's really important that it's not allocated as 'Other Income' as this will result in the income being counted twice, and the balance sheet wrongly showing an outstanding Gift Aid accrual.
Splitting Gift Aid income
Gift Aid claims in ExpensePlus are created by fund, so typically you won't need to split Gift Aid income.
However, if you have a restricted fund that contains income with different restrictions, then you may need to split Gift Aid income to ensure that the income is allocated to the specific categories it needs to be allocated to.
To do this, once you've reconciled the Gift Aid income, click on the income transaction to split the transaction
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Note: you cannot split a Gift Aid claim amongst categories that are within different funds.
To better understand the Bank Reconciliation module, please view the module overview video here.