In recent years, clinching has gathered popularity to join sheets of different materials in industrial applications. The manufacturing process has some advantages, as reduced joining time, reduced costs, and the joints show good fatigue properties. To ensure the joint strength, reliable simulations of the material behaviour accounting for process-induced damage are expected to be beneficial to obtain credible values for the ultimate joint strength and its fatigue limit. A finite plasticity gradient-damage material model is outlined to describe the plastic and damage evolutions during the forming of sheet metals, later applied to clinching. The utilised gradient-enhancement cures the damage-induced localisation by introducing a global damage variable as an additional finite element field. Both, plasticity and damage are strongly coupled, but can, due to a dual-surface approach, evolve independently. The ability of the material model to predict damage in strongly deformed sheets, its flexibility and its regularization properties are illustrated by numerical examples.