How do I allocate Gift Aid Income from HMRC?
ExpensePlus creates separate claims for each fund, making it easy to allocate payments from HMRC to the correct fund.
Typically, Gift Aid income from HMRC is recorded within the Match Transactions screen once the bank statement in which it appears has been uploaded. Simply select the transaction on the left-hand table, click the + button, select the Other Income option, and add the details for the transactions, and select the fund/category it relates to (you can check the completed claims section on the Gift Aid screen if you are not sure).
Note: You can identify Gift Aid claims by the claim reference number which you can view in 'Completed Gift Aid claims' screen. This reference is also stated on your Gift Aid letter from HMRC once the Gift Aid has been paid into your account.
How often should I claim Gift Aid?
Some organisations claim Gift Aid monthly, quarterly or yearly whilst others claim more sporadically. Larger organisations often claim monthly in order to attribute Gift Aid income not just to a fund, but also to the month to which it relates (albeit that this is slightly complicated by backdated Gift Aid amounts that might be able to be claimed where a donor completes a Gift Aid declaration and chooses a backdated start date). Typically, GASDS is claimed annually at the end of the tax year, but this is up to you.
Budgeting and Gift Aid income
Gift Aid often accounts for a significant part of most organisations' income, so if you choose NOT to claim Gift Aid on a monthly basis, you may wish to adjust the budget profile for your Gift Aid income categories to match when you plan to make claims and receive income (e.g. if you plan to claim Gift Aid quarterly, then it's worth considering profiling the budget for the income category you will record this against rather than choosing the default option of 'linear' when you set this budget up within the Income & Expenditure Category Settings screen). You can read more about this here.
Adding accruals for Gift Aid income
If you create accounts on an accruals basis, you may instead decide that you wish to create a monthly accrual for Gift Aid so that it can be allocated to the month it relates to (rather than the month it arrives in the bank). This often simplifies reporting greatly and removes artificially created peaks and troughs caused when Gift Aid claims are made. For details on how to create this adjustment, click here. Organsations creating accounts on cash/receipts & payments basis should NOT do this.
To better understand the Bank Reconciliation module, please view the module overview video here.