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.
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.