Taxi and Private-Hire Driver Expenses: What Can You Claim Against Tax?

Taxi and private-hire drivers often have several business expenses, including fuel, insurance, repairs and licensing costs. Claiming the correct expenses may reduce your taxable profit and tax bill.

Below are answers to some commonly asked questions.

Do taxi and private-hire drivers need to register with HMRC?

If you work for yourself and your total gross trading income is more than £1,000 during the tax year, you will normally need to tell HMRC and may need to register for Self Assessment.

This may apply to taxi drivers and drivers working through platforms such as Uber, Bolt or other private-hire operators.

What vehicle expenses can a taxi driver claim?

Depending on your circumstances, you may be able to claim the business proportion of:

• Fuel
• Vehicle insurance
• Repairs and servicing
• MOT costs
• Road tax
• Breakdown cover
• Tyres
• Cleaning and valeting
• Vehicle rental or lease payments

You cannot claim expenses relating to the private use of your vehicle.

Can I claim mileage instead of vehicle expenses?

Some self-employed drivers may use simplified mileage expenses instead of claiming their actual vehicle running costs.

The appropriate method will depend on your vehicle, annual mileage, ownership arrangements and operating costs. You should compare both methods before deciding.

Can I claim taxi and private-hire licence fees?

Business-related licensing costs may usually be allowable, including:

• Driver licence fees
• Vehicle licence fees
• DBS checks required for the work
• Medical examinations required for licensing
• Local authority application and renewal fees

Keep receipts and renewal documents as evidence.

Can I claim Uber, Bolt or operator fees?

Platform commission, operator charges, booking fees and card-processing fees may normally be claimed as business expenses.

Your income should generally be recorded before these charges are deducted. The commission or operator fee can then be recorded separately as an expense.

Can I claim my mobile telephone bill?

You may be able to claim the business proportion of your telephone and data costs if you use your phone for bookings, navigation, contacting passengers or operating driver applications.

If the same phone is also used personally, you should claim only a reasonable business proportion.

Can I claim cleaning and valeting costs?

Cleaning and valeting costs may usually be claimed where they relate to keeping your licensed vehicle clean and suitable for passengers.

This may include car washes, professional valeting and cleaning products.

Can I claim food while working?

Ordinary meals purchased during a normal working day are generally personal expenses and are not automatically allowable.

There may be limited circumstances where food costs qualify during certain business journeys, but the rules should be checked carefully before making a claim.

Can I claim parking costs and fines?

Business-related parking charges may be allowable. However, parking fines, speeding fines and other penalties are generally not allowable business expenses.

Can I claim the cost of buying my taxi?

The purchase of a vehicle is treated differently from ordinary running costs. Tax relief may be available through capital allowances, depending on the vehicle, emissions, business use and how it was purchased.

Drivers should obtain advice before claiming the cost of a vehicle.

What records should taxi drivers keep?

You should keep records of:

• Cash, card and platform income
• Platform statements
• Operator commissions
• Business mileage
• Fuel and vehicle costs
• Insurance and licensing fees
• Bank statements
• Receipts and invoices

Keeping complete records makes it easier to prepare an accurate tax return and support any expenses claimed.

Need help with your taxi or private-hire accounts?

Every driver’s circumstances are different. The expenses you can claim may depend on how you work, which vehicle you use and whether it is also used privately.

Gondal Accountancy can assist taxi, Uber, Bolt and private-hire drivers with Self Assessment, bookkeeping, allowable expenses, vehicle costs and tax planning.

For advice based on your circumstances, contact Gondal Accountancy:

Telephone: 0121 439 9760
Website: www.gondalaccountancy.co.uk

This article provides general information only. Please obtain professional advice based on your individual circumstances.