What makes charity books hard
For most charities, income tax isn’t the question; GST or VAT recovery is. Donations and most grants sit outside the tax, so the costs of the work they fund often can’t carry a full claim. The rules differ sharply: Australian charities claim much like businesses, UK charities can’t recover non-business VAT, New Zealand charities return grants as taxable income, Canadian charities rely on a rebate, and Singapore charities apportion subsidised activities.
What ExpenseFlow checks on a charity invoice
A line or account that signals grant-funded, fundraising or non-business activity is flagged with your country’s rule:
- Australia. Credits only to the extent a purchase is for a creditable purpose, an accountant’s judgement rather than a per-invoice one.
- United Kingdom. Input VAT on non-business or exempt activity generally not recoverable, with overheads apportioned through partial exemption at period end.
- New Zealand. Input tax recovered only to the extent costs support the taxable activity, apportioned at period end.
- Canada. Recovery through the 50% public service bodies’ rebate rather than full input tax credits, via the charity’s net tax method.
- Singapore. Input tax on free activities generally not claimable, with shared costs apportioned on a basis agreed with IRAS.
Everything else it does on every invoice
- Captures invoices and receipts by email forward, upload or phone photo, including volunteer reimbursements.
- Reads line items, tax and totals.
- Codes each line to an account and tax code, with a written reason and a confidence score.
- Routes uncertain lines to a review queue with roles and per-row approvals, so treasurers and finance staff sign off before anything posts.
- Syncs after approval to Xero with the source document attached, or to QuickBooks Online as a coded bill with the source document attached.
What it does not do
It does not compute your recovery percentage, run partial exemption, claim the rebate, decide charity status or file your return.