Self Employed Delivery Driver Tax: A Comprehensive UK Guide

This guide provides essential information about self employed delivery driver tax, which can be challenging for many taxi and delivery drivers.

When do I need to tell HMRC I am self-employed?

When your gross sole trader income (before expenses are deducted) goes over the £1,000 trading allowance in a tax year (6th April to 5th April), you will need to sign up for self-assessment to inform HM Revenue that you are self-employed. You must complete a self assessment online form to pay any self employed delivery driver tax and NI due on your income.

What are the self-assessment deadlines?

Self-assessment deadlines are based on tax years, not calendar years, and are done in arrears. For the 2025/26 tax year (6 April 2025 to 5 April 2026), you must:

• Register for self-assessment by 5 October 2025 if you haven’t filed before
• Submit a paper return by 31 October 2025
• Submit an online return by 31 January 2026
• Pay any tax owed by 31 January 2026

How much is the self employed delivery driver tax?

The income tax rates for 2025-2026 are:

• Personal allowance of £0 to £12,570 = 0%
• Taxable income of £12,571 to £50,270 (low-rate tax band) = 20%
• Taxable income of £50,271 to £125,140 (high-rate tax band) = 40%
• Taxable income of over £125,140 (additional rate taxpayer) = 45%

You pay Class 2 NICs if your annual taxable profits are £6,725 or more, and Class 4 NICs if your annual profits are £12,570 or more.

Class 2 NICs are £3.45 a week, while Class 4 NICs are 9% on profits between £12,570 and £50,270 and 2% on profits over £50,270.

Vehicle-related allowable expenses?

Vehicle-related allowable expenses you can claim as a self employed driver can include the following:

• fuel
• vehicle repair and servicing
• road tax
• MOT costs
• insurance and courier insurance
• breakdown cover
• parking and toll fees
• interest on loans taken out to buy a vehicle
• vehicle purchase, hire, or leasing costs

If you use a vehicle for business and personal reasons, you must calculate the split for costs. If you use a panel van only for work and use your own car for personal journeys, it will be easier to work out and claim all of your van expenses as an allowable business expense.

You cannot claim expenses for parking fines, speeding fines, work clothes, or daily meal deals. However, you can claim mobile phone charges, either for the full cost if used only for work or a proportion if used for both business and personal calls.

Claiming for fuel and mileage as a self employed driver?

Using the flat-rate mileage allowance scheme offers a simpler solution to claiming allowable fuel and vehicle costs. You keep a log of all business miles travelled and each year claim a mileage allowance of:

• £0.45 a business mile travelled in your car or van for the first 10,000 miles and
• £0.25 a business mile thereafter or
• £0.24 a mile if you use a motorbike.

Whichever method you choose, you either enter the actual costs or the total mileage allowance cost into your annual self assessment online form. This amount is taken away from your taxable profits before HMRC calculates your tax bill for that tax year.

If you claim mileage allowance, you cannot also claim for insurance, services, road tax, vehicle wear and tear, etc., because mileage allowance covers these too. Work out likely annual mileage before deciding how to claim for vehicle costs.

If you use a vehicle for business and personal reasons, you must calculate the split for costs. For example, if 70% of your mileage is for business purposes, you can only claim 70% of your vehicle expenses.

Let’s look at some scenarios:

1. James, a Food Delivery Driver: James earns £20,000 annually by delivering food through platforms like Uber Eats and Deliveroo. He uses his personal vehicle for work, incurring annual costs of £3,500 on fuel, insurance, and maintenance. James opts for the mileage allowance scheme, claiming £0.45 per mile for his first 10,000 miles.

2. Tom, a grocery delivery driver: Tom owns a van exclusively used for work. Over the year, he spends £2,500 on fuel, £1,200 on maintenance, and £800 on insurance. By claiming these as allowable expenses, Tom reduces his taxable income.

Capital allowances?

• Traditional accounting (i.e., where you record income and expenses by the date you invoiced or were billed): If you buy a car for your business, you can claim a capital allowance and deduct some of the car's value from your profits before tax. The amount depends on the car’s CO2 emissions and the purchase date.

• Cash-basis accounting (i.e., where you record income and expenses by the date you were paid or paid expenses): You can only claim a capital allowance for a car if you don’t use the mileage allowance scheme.

• The cost of buying a van should be claimed as an allowable expense.

• Leasing or hiring a car or van is tax deductible, but if CO2 emissions exceed a certain threshold, you won’t be able to claim all of the hire charges or rental payments.

How to register for a self employed tax return?

This can be done online through the HMRC website here.

When you register, you will need to provide various personal details such as your name, address, date of birth, national insurance number, etc.

Once HMRC have processed your application, you will receive your unique tax reference number in the post. This number is needed to complete your self assessment online form.

Do you have income to declare from self-employment? If so, you’ll need to fill out a supplementary page. For self employed drivers, it's page SA103. On this page, you’ll need to report income from these sources that you haven’t paid tax on. You should also declare any allowable expenses, which will be deducted from your tax bill.

How do you file your tax return with Taxd

First, you need to create an account by answering a few questions here if you're a new user. Otherwise, you can simply log in to your account if you already have one.

It will then take you to this page: https://assessment.taxd.co.uk/, where you will get a detailed questionnaire to file your self-assessment tax return.

Section 1: Introduction

Input details like your job status and additional income source.

Section 2: Self-Employment

If you were self-employed during the tax year, you'll need to fill out this section. Prepare details of your income, expenses, and any supporting documents, such as invoices or receipts, for accurate reporting.

Section 3: Tax Return Filed

Once you are through all the sections, review the tax calculation and submit the return digitally to HMRC after verifying your identity.

Conclusion

Filing the self employed tax return can be extremely difficult for cab & delivery drivers. The process can be complex and time-consuming. Taxd can help you complete the tax return process in a hassle-free manner and on time. We comply with HMRC guidance and legislation and know how to help you save tax.

FAQs

1. How is a self employed delivery driver taxed in the UK?

Income Tax: Your tax earned at 20%, 40%, or 45%, depending on how much you earn. Class 4 National Insurance: This is a percentage charge (6%) on your earnings if they exceed £12,570 per year.

2. Are taxi drivers self-employed in the UK?

Yes, most private hire drivers in the UK are considered self-employed, whether they're driving a black cab, using a personal vehicle, or working for a ride-hailing company like Uber. This applies to freelance, part-time, and full-time drivers alike.

3. How are Uber drivers taxed in the UK?

The taxes you'll be required to pay depend on how you operate. Choose from being a limited company or sole trader; the majority of UK Uber drivers go for the latter. Sole traders pay tax along with National Insurance. Tax is paid at the same rate as those who are employed, but the National Insurance rates differ.