How much tax should a courier driver set aside? Tax and allowable expenses for 2025/26
Self-employed couriers are paid per parcel, per drop or per day, and the van takes much of the money back out. Looking only at what lands in your account overstates the profit and then understates what's due.
What the tax looks like
Using the 2025/26 rates (England, Wales or Northern Ireland, no other income), a courier driver with £45,000 of takings and £12,000 of allowable costs has £33,000 of profit and about £5,312 of income tax and Class 4 National Insurance for the year, roughly £443 a month. The figures are an illustration, not an average for the trade. Tax is on profit, not takings.
| Profit for the year | Income tax + Class 4 NI | Per month | Per £1 of profit |
|---|---|---|---|
| £20,000 | £1,931.80 | £161 | 10p |
| £33,000 | £5,311.80 | £443 | 16p |
| £50,000 | £9,731.80 | £811 | 19p |
Open the calculator already filled in with this example and change the two numbers to yours. It also shows the January and July payment dates.
Costs a courier driver usually claims
Claim only what you actually spent on the business, and only the business share of anything you also use personally.
- Fuel or charging, insurance, servicing, tyres and MOT for the van.
- Van lease or hire payments, if you rent the vehicle.
- Phone, data and scanner or app costs for the business share.
- Parking and tolls incurred on deliveries, but not fines.
- Hi-vis and protective clothing.
- Goods-in-transit and public liability insurance.
The general list is on GOV.UK: self-employed expenses you can claim, and what you can't. If your costs for the year are under £1,000, the trading allowance may leave you less tax.
Van costs or the flat mileage rate
GOV.UK's simplified expenses give 45p a mile for the first 10,000 miles on cars and goods vehicles including vans before 6 April 2026, 55p for the first 10,000 from that date, then 25p. A courier covering 25,000 miles a year goes through the 10,000 mark quickly, and the actual cost of a van can then be higher than the flat rate. Compare the two for your year. The flat rate means not claiming fuel, insurance and repairs separately for the same vehicle. If you hire or lease the van, check the GOV.UK guidance before choosing a method.
VAT
Parcel income counts as taxable turnover. Once the last 12 months pass £90,000 you must register for VAT; the platform or depot's deductions are part of the total.
Records worth keeping
- Keep the depot or platform pay statements: they are your income record, and the figures can differ from the bank.
- Log miles by day: start point, number of drops, finish point.
- Keep the lease or hire agreement and its payment history.
- Total fuel by month, then compare with miles to spot anything off.
Made for couriers: parcel rates, van costs and a mileage log: the Courier Driver Accounts Spreadsheet is a one-off £4.99 download for Excel and Google Sheets. It is a spreadsheet only: nothing here files anything with HMRC, and the sheet doesn't replace an accountant if your case is complicated.
Dates matter too: the 2025/26 return and tax are due on 31 January 2027, and payments on account can make that January bigger than the year's bill.
This is a planning guide, not tax advice. Figures worked with the calculator's 2025/26 rules, and GOV.UK sources read on 21 October 2026: Expenses if you're self-employed, Simplified expenses: vehicles, When to register for VAT.
Try the calculator with this example