Uber and Bolt Driver Tax in the UK: What You Actually Owe

If you drive for Uber, Bolt, Veezu or a local operator, you are self-employed. Nobody is deducting tax from your fares, and no P60 arrives in April. HMRC expects you to declare the income yourself, work out what you owe, and pay it by 31 January. This guide covers what actually counts as income, what you can take off it, and the choices that make the biggest difference to the bill.

Are Uber and Bolt drivers self-employed?

For tax purposes, yes. The 2021 Supreme Court ruling that made Uber drivers "workers" for employment rights — holiday pay and the minimum wage — did not change their tax status. You are still taxed as a self-employed sole trader, you still file a Self Assessment return, and you are still responsible for your own National Insurance.

If you started driving during a tax year, you must register with HMRC by 5 October following the end of that tax year. Start in June 2026 and you have until 5 October 2027. Register late and HMRC can charge a penalty based on the tax you owed.

What counts as your income?

This is where most drivers get it wrong. Your income is the full fare the passenger paid, not the amount that reached your bank account. The operator's service fee is a business expense you claim separately.

It makes no difference to the final tax, but it matters for two things: the VAT threshold is measured on the gross figure, and a return that only shows net payouts will not reconcile against the summary the operator sends HMRC.

Also include tips, incentives, bonuses and any referral payments. Uber and Bolt report these to HMRC. Since January 2024, digital platforms have been required to report what they pay each driver directly to HMRC under the reporting rules for digital platforms, so leaving anything out is noticed.

What expenses can you claim?

You can deduct costs incurred wholly and exclusively for the business. For a driver, that is:

• Operator service fee — usually the largest single deduction
• Fuel or charging
• Insurance — hire and reward cover
• Private hire driver licence and vehicle plate
• MOT, servicing, repairs and tyres
• Breakdown cover
• Car washing and valeting
• Mobile phone — the business proportion of the bill
• Accountancy fees
• Vehicle finance interest — the interest, not the capital repayments

You cannot claim the cost of getting from home to your first pick-up if you drive a fixed route to the same starting point, ordinary clothing, food while you are out working, or parking fines and speeding tickets. HMRC is specific that penalties are never deductible.

Mileage or actual costs: which is worth more?

You have two ways to claim vehicle running costs, and you must choose one per vehicle.

Method	What you claim	Best when
Simplified mileage	45p per business mile for the first 10,000 miles in the tax year, then 25p per mile	Ordinary, economical car with high mileage
Actual costs	The real bills — fuel, insurance, servicing, repairs — plus capital allowances on the vehicle	Expensive vehicle, high depreciation, or a new electric car

A driver covering 25,000 business miles claims £8,250 under the mileage method (10,000 × 45p, plus 15,000 × 25p). For that to be beaten on actual costs, the real running costs plus capital allowances would have to exceed £8,250 — which happens with a newer or larger vehicle more often than drivers expect.

Keep a mileage log either way. It does not need to be complicated: date, start, end, miles and purpose. Without it, HMRC can refuse the claim entirely.

Buying a car: capital allowances

If you claim actual costs, the purchase price of the vehicle is not a straight deduction. It goes through capital allowances, and the rate depends on CO₂ emissions:

• 0 g/km — 100% first-year allowance, but only on a brand new and unused car
• 1–50 g/km — 18% a year on a reducing balance (main pool)
• Over 50 g/km — 6% a year on a reducing balance (special rate pool)

You then restrict the claim to the business-use proportion. A car used 80% for driving work and 20% privately gets 80% of the allowance.

National Insurance

Class 2 National Insurance was abolished for most self-employed people from April 2024. If your profits are above the small profits threshold you are still credited with a qualifying year towards the state pension without paying it. Class 4 remains: 6% on profits between £12,570 and £50,270, and 2% on anything above.

Deadlines that cost money

Date	What is due
5 October	Register with HMRC if this was your first year of driving
31 October	Paper returns
31 January	Online return, plus the balancing payment and first payment on account
31 July	Second payment on account

Miss 31 January and there is an automatic £100 penalty, whether or not you owe tax. After three months, daily penalties of £10 start, up to £900. After six months, a further penalty of 5% of the tax due or £300, whichever is greater. Interest runs on late payments separately.

Payments on account catch people out

If your bill is more than £1,000, HMRC asks for the next year's tax in two instalments in advance. In your first profitable year that means paying the year's tax and half of next year's on the same 31 January. Drivers who were not warned about this find a bill roughly 50% larger than they expected. Put money aside monthly — a third of profit is a reasonable rule for a basic-rate driver.

Getting help with this

AJH Accountants handles private hire and taxi driver accounting for clients across the UK. We file the return, tell you what you can claim, and deal with HMRC on your behalf, so nothing depends on you remembering a deadline.

See how our private hire and taxi driver accounting service works, or send us a quotation request and we will call you back. You can also call the office on 01204 840303.