How much tax should a private hire driver set aside? Tax and allowable expenses for 2025/26
Driving for Uber, Bolt or a local firm is often self-employed work, in which case the tax is yours to put aside. Platform statements show your fares, but your profit is after the costs of keeping the car on the road.
What the tax looks like
Using the 2025/26 rates (England, Wales or Northern Ireland, no other income), a private hire driver with £42,000 of takings and £14,000 of allowable costs has £28,000 of profit and about £4,012 of income tax and Class 4 National Insurance for the year, roughly £334 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 |
|---|---|---|---|
| £17,000 | £1,151.80 | £96 | 7p |
| £28,000 | £4,011.80 | £334 | 14p |
| £42,000 | £7,651.80 | £638 | 18p |
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 private hire 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 and MOT if you claim actual vehicle costs.
- Licence fees: private hire driver and vehicle licences from your local council.
- Commission and booking fees taken by the platform or the firm.
- Car washing, phone mounts, data for the business share of the cost.
- Parking and tolls on trips, but not fines.
- Vehicle costs vs mileage: you choose either actual running costs or the flat rate (55p for the first 10,000 business miles from 6 April 2026, 25p after, and 45p before that date). Not both for the same vehicle.
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.
VAT: the rule that catches drivers out
GOV.UK's notice on taxis and private hire cars says an owner-driver making taxable supplies must register for VAT if the full amount they're paid exceeds the registration threshold, currently £90,000. Amounts a firm deducts before paying you, such as vehicle rental or agency charges, count towards the total. Being an employee driver is different: the notice says employees aren't treated as being in business for VAT. A second point: the simplified mileage rates exclude cars designed for commercial use, such as black cabs, so the choice described above is for ordinary private hire cars.
VAT
Owner-drivers must register once the full amount paid for taxable supplies passes £90,000 (GOV.UK notice 700/25 and the VAT threshold page). Check the rolling 12-month total, since platform fees count.
Records worth keeping
- Download the platform's weekly statements monthly. They can be harder to find at the end of the year.
- Log business miles from the day you start driving; separate them from personal journeys if you use the same car.
- Keep the licence invoices and the insurance schedule: both are costs.
- Total your fares before commission, then the commission separately, so your income and costs both tie to the return.
Helps with the part drivers most often lose track of: business miles by vehicle and month: the HMRC Mileage Log 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, VAT notice 700/25 (taxis and private hire), Simplified expenses: vehicles, When to register for VAT.
Try the calculator with this example