A Guide to Tax Benefits for NABD Members & Donors

If you are a UK taxpayer, your donations to the National Association for Bikers with a Disability (NABD)* can unlock valuable tax advantages, many of which people are unaware of. The way you claim these benefits depends on how you pay tax, and the value of the relief depends on your tax bracket.

This guide explains the options in clear, straightforward terms.

NB: This article is general information only and is not personal tax advice. Tax rules can change and your circumstances matter, check HMRC guidance or speak to a qualified adviser if you are unsure.

Gift Aid is a UK government scheme allowing charities to reclaim 25p in addition to every £1 donated by a UK taxpayer, at no extra cost to the donor.

For the charity to benefit, donors must make a Gift Aid Declaration, and they must have paid enough Income Tax and/or Capital Gains Tax to cover the amount reclaimed during that tax year.

Many pensioners can also ‘Gift Aid’ donations if they pay UK Income Tax or Capital Gains Tax, provided the tax paid covers the 25% amount the charity reclaims. If living solely on a standard state pension, they may not pay enough tax for Gift Aid, but tax on private pensions, savings, or property sales counts.

A valid Gift Aid declaration must include:

• The charity name
• The donor’s full name and home address (including postcode)
• Details of the donation

If you live in the Channel Islands or the Isle of Man, you must state you are a “non-UK donor” and omit the postcode.

A Gift Aid declaration can apply to:

• A single donation
• All donations made in the previous four financial years
• All future donations

NB. Donors can cancel a declaration at any time.

NABD membership subscriptions are classed as ‘Donations’ which means they qualify for Gift Aid.

An NABD Membership Gift Aid Declaration covers all donations made to the NABD (including those made over the four previous financial years, and all future donations).

NB. Not all membership subscriptions to charities are classed as donations. You should check with the specific charity for verification.

To claim Tax Relief on your donations, you must have completed a Gift Aid declaration.

People on PAYE:

If you pay tax through PAYE, Gift Aid can still be valuable. The charity can reclaim basic-rate tax on your donation, and if you pay higher or additional rate tax you may be able to claim extra relief from HMRC (often through an adjustment to your tax code or a refund).

Gift Aid can also extend your basic-rate band and may reduce your adjusted net income for certain income-based thresholds.

Donations made by Cash, Card or Bank Account: (Gift Aid)
If you donate via cash, debit card, credit card, direct debit, or bank transfer, the charity can claim Gift Aid because you have already paid tax on that income.

Making a Claim:
To claim your own tax relief, you can:

• Contact HMRC with details of your Gift Aid donations (they may adjust your tax code or issue a repayment where appropriate).
• If you complete a Self Assessment tax return, include your Gift Aid donations there instead.
• You can usually claim for donations made in the previous four tax years, as long as you had a valid Gift Aid declaration in place for the donations.

If HMRC agrees you are due additional relief, they may issue a repayment and/or adjust your tax code so you pay less tax going forward.

If your employer offers the ‘Payroll Giving’ scheme, you can get automatic tax relief on regular charitable donations by donating from your gross salary before income tax is calculated and deducted.  This gives you immediate tax relief without any forms or declarations.

Because you will not be taxed on the portion of your salary you donate:

• Basic rate (20%) taxpayers: £10.00 donation only costs you £8.00, a £50.00 donation only costs you £40.00, a £100.00 donation will cost you just £80.00
• Higher rate (40%) taxpayers: £10 donation only costs you £6, a £50.00 donation only costs you £30.00, and a £100.00 donation costs you just £60.00.
• Additional rate (45%) taxpayers: £10 donation only costs you £5.50, a £50.00 donation only costs you £27.50, and a £100.00 donation costs you just £55.00.

NB. Payroll Giving donations do not qualify for Gift Aid, but they do reduce the donor’s tax liability.

If you are self-employed, and subject to basic rate (20%) income tax, your charitable donations qualify for Gift Aid, so as long as you have completed a Gift Aid declaration for the charity, the charity can claim an additional 25% from the HMRC on each donation.

If you complete a Self Assessment tax return, you can claim any additional relief you are entitled to by entering your Gift Aid donations on your return. This is not a business expense “write-off”; it is relief for personal charitable giving.

Making a Claim:
Enter your Gift Aid donations in the ‘Charitable Giving’ section of your self-assessment return.  This reduces your taxable income and may also reduce tax due on dividends or pensions.

Enter the gross value of your Gift Aid donations in the ‘Charitable giving’ section of your Self Assessment return. For higher and additional rate taxpayers this can generate extra relief (because Gift Aid only gives the charity basic-rate relief).

Gift Aid can also extend your basic-rate band and may reduce your adjusted net income for certain income-based thresholds (for example, the personal allowance taper above £100,000).

NB. These claims can include all donations made over the previous four financial years, if a Gift Aid declaration has been completed.

If you pay tax at the 40% higher rate or the 45% additional rate, you may be able to claim extra tax relief on top of the Gift Aid amount the charity reclaims.

Gift Aid only accounts for basic‑rate tax (20%). If you pay 40% Tax or 45% Tax, you can reclaim the difference.

For example:

• You donate £100
• The charity claims £25 (Gift Aid)
• You can reclaim an additional £25 (40% rate) or £31.25 (45% rate)

Making a Claim:
Enter details of your Gift Aid donations in the ‘Charitable giving’ section of your Self Assessment tax return.

If you don’t fill in a self-assessment form, you can contact HMRC directly to inform them of the donations, which should result in a tax code adjustment or a tax refund.

NB. Claims can include donations from the previous four financial years, if a Gift Aid Declaration has been completed.

If your adjusted net income is over £100,000, your personal allowance is reduced by £1 for every £2 of income over £100,000. This can create an effective 60% marginal rate for some income between £100,000 and £125,140 (often called the “60% tax trap”).

Gift Aid donations can reduce your adjusted net income and may help to restore some or all of your personal allowance.

For these purposes, Gift Aid donations are treated as being made gross (i.e. your donation plus the basic-rate tax the charity reclaims). That gross amount is used when calculating adjusted net income.

For Example:
If your income is £110,000, your personal allowance is reduced by £5,000.

• Donate £8,000 to the National Association for Bikers with a Disability* and make a Gift Aid declaration
• This donation is ‘grossed-up’ to £10,000
• Your adjusted net income is now £100,000
• Your full personal allowance is restored, removing you from the 60% tax trap

This can produce substantial tax savings while supporting a most worthy cause.

NB. Claims can include donations from the previous four financial years, if a Gift Aid Declaration has been completed.

In addition to the tax benefits of making a Gift Aid donation to The National Association for Bikers with a Disability, the physical and psychological benefits of such altruism should never be underestimated!

According to the National Institutes of Health (.gov):

Altruism, the selfless act of helping others, provides significant physical and psychological health benefits, including:

• lower blood pressure
• reduced stress
• boosted immune function
• increased longevity

It also triggers “a helper’s high”, due to the release of endorphins and dopamine, resulting in:

• increased happiness,
• increased confidence,
• a sense of purpose
• reducing anxiety.

I hope this article has given you a better understanding of the tax advantages of making donations to the NABD and indeed of becoming a member of the NABD.

Every donation received by the NABD is much needed and wisely used for the benefit of people with disabilities, many of whom find renewed joy and freedom through independent motorcycling at a time when they may be facing significant challenges.

Every donation to the NABD, large or small, can help to change lives for the better. To paraphrase what may have conceivably been a slogan in an Ancient Roman supermarket…  “Omnis exigua adjuvat” (Every little bit helps).

To find out more about the National Association for Bikers with a Disability, see: https://nabd.org.uk/

Rick Hulse
NABD Chairman

* These tax benefits also apply to donations made to other registered charities.