Tax Guide for Uber and Deliveroo Drivers

Working as an Uber driver, Deliveroo rider, or for any other gig economy delivery platform can be a flexible and rewarding way to earn a living. But with that flexibility comes a responsibility that many drivers overlook until it is too late: tax. Unlike traditional employment, where your employer handles PAYE and National Insurance, gig economy workers are classified as self-employed in most cases, which means you are responsible for reporting your income and paying your own tax.

This guide covers everything Uber and Deliveroo drivers need to know about tax in the UK, from registering with HMRC to claiming expenses that can significantly reduce your tax bill.

Are You Self-Employed?

The first question to address is your employment status. Most Uber drivers and Deliveroo riders are classified as self-employed for tax purposes, even if you work exclusively for one platform. This is because you typically:

• Choose when and where you work
• Use your own vehicle or bicycle
• Are not guaranteed a minimum number of hours
• Bear financial risk (you pay for fuel, maintenance, and insurance)

It is worth noting that employment status for tax purposes and employment status for workers' rights are different things. The HMRC employment status guidance covers the distinction in detail. For most gig economy workers, you are self-employed for tax purposes, which means you need to register as self-employed and file a self-assessment tax return.

Registering with HMRC

If you have not already done so, you must register as self-employed with HMRC as soon as you start working. You can do this online through the HMRC website. You need to register by 5 October following the end of the tax year in which you started working. For example, if you started driving in June 2025, you must register by 5 October 2026.

When you register, you will be issued a Unique Taxpayer Reference (UTR) number, which you will need for all future dealings with HMRC. For a complete walkthrough, see our guide on registering as self-employed.

Understanding Your Income

Your income from Uber, Deliveroo, or similar platforms is the total amount you receive for your services. This is the gross fare or delivery fee, not just the amount that reaches your bank account.

Uber Drivers

Uber pays you a percentage of each fare. However, for tax purposes, your income is calculated differently depending on how HMRC views the arrangement. In most cases, your income is the amount Uber pays into your account, and you do not need to worry about the Uber commission separately, as it is already deducted before you receive payment.

Uber provides a tax summary through the Uber app, which shows your total earnings for the tax year. This is a useful starting point, but do not rely on it exclusively. Cross-reference it with your bank statements to make sure everything matches.

Deliveroo Riders

Deliveroo pays you per delivery, including a base fee and sometimes a distance component. Your income is the total amount Deliveroo pays you, which you can find in your Deliveroo rider account or through their invoicing system.

Multiple Platforms

Many drivers work across multiple platforms, perhaps doing Uber in the mornings and Deliveroo in the evenings, or supplementing with Just Eat or Amazon Flex work. You must declare income from all platforms on your tax return. Keep separate records for each platform and reconcile them against your bank statements.

The Trading Allowance

If your total self-employment income (across all platforms) is less than £1,000 in a tax year, you can use the trading allowance. This means you do not need to register as self-employed or file a tax return. However, most active drivers will earn significantly more than £1,000, so the trading allowance is only relevant for very occasional work.

Allowable Expenses for Uber Drivers

This is where understanding the tax rules can save you a significant amount of money. As a self-employed driver, you can deduct legitimate business expenses from your income before calculating tax. The more expenses you can claim, the less tax you pay.

Vehicle Expenses

You have two options for claiming vehicle expenses:

Option 1: Simplified Mileage Rate

You can claim a flat rate per business mile driven:

• 45p per mile for the first 10,000 miles in the tax year
• 25p per mile for any miles over 10,000

This rate is designed to cover all vehicle running costs, including fuel, insurance, servicing, repairs, and depreciation. If you choose this method, you cannot claim these costs separately.

To use this method, you need to keep a log of your business miles. The Uber app provides trip data, but you should also record miles driven between trips, such as travelling to your first pickup of the day or driving to a busier area.

Option 2: Actual Costs

Alternatively, you can claim the actual costs of running your vehicle, but only the proportion that relates to business use. This includes:

• Fuel
• Insurance
• Road tax
• MOT and servicing
• Repairs and maintenance
• Breakdown cover
• Vehicle financing costs (lease payments or loan interest, not the capital repayment)
• Depreciation through capital allowances

To use this method, you need to calculate the percentage of your total mileage that is for business purposes and apply that percentage to your total costs.

For most Uber drivers doing a high volume of miles, the simplified mileage rate is often more beneficial and much simpler to administer. However, it is worth calculating both to see which saves you more tax. Note that once you choose the mileage method for a particular vehicle, you must stick with it for the life of that vehicle.

Expenses for Deliveroo Riders on Bicycles and E-Bikes

If you deliver by bicycle or e-bike, you can claim:

• The cost of the bicycle (or depreciation through capital allowances)
• Repairs and maintenance
• Replacement parts (tyres, chains, brake pads)
• Accessories used for work (lights, locks, panniers)
• Clothing specifically for cycling in poor weather (waterproofs, gloves)

You can also claim the cycle mileage rate of 20p per mile, though for most riders, claiming actual costs is more beneficial.

Other Allowable Expenses

Beyond vehicle costs, you can claim:

• Phone costs: The proportion of your mobile phone bill that relates to business use, as you need your phone to use the apps
• Phone mount and charger: If you buy a phone mount for your car or a portable charger for use while working
• Delivery equipment: Thermal bags, backpacks, and other equipment required for deliveries
• Protective clothing: High-visibility vests, helmets, and weather protection
• Accountancy fees: The cost of an accountant or accounting software to prepare your tax return
• Insurance: Any additional business insurance, including public liability or goods in transit insurance
• Platform fees: Any fees charged by the platform for access, though most platforms deduct their commission before paying you
• Parking and tolls: Parking fees and toll charges incurred while working (but not parking fines or congestion charges)

Keep receipts for everything and log your expenses as they occur. Using accounting software like Accounted makes this dramatically easier, as you can photograph receipts with your phone and categorise expenses automatically.

For a comprehensive list of deductible expenses, see our guide on tax deductions for sole traders.

How Much Tax Will You Pay?

Your tax bill depends on your total income from all sources minus your allowable expenses. As a self-employed person in the UK, you pay:

Income Tax

Your profits (income minus expenses) are added to any other income you have. You then pay income tax based on the standard bands:

• Personal allowance: £0 tax on the first £12,570
• Basic rate: 20% on income from £12,570 to £50,270
• Higher rate: 40% on income from £50,270 to £125,140
• Additional rate: 45% on income above £125,140

National Insurance

As a self-employed person, you pay:

• Class 2 NI: A flat rate of a few pounds per week (currently included in your self-assessment bill)
• Class 4 NI: 6% on profits between £12,570 and £50,270, and 2% on profits above £50,270

Example Calculation

Let us say you earned £30,000 from Uber driving and claimed £8,000 in allowable expenses. Your taxable profit is £22,000.

Income tax: 20% on £22,000 minus £12,570 = 20% on £9,430 = £1,886 Class 4 NI: 6% on £9,430 = £565.80

Total tax and NI: approximately £2,452 (plus a small amount of Class 2 NI)

Without claiming expenses, your tax bill would have been calculated on £30,000 of profit, resulting in significantly more tax. This illustrates why tracking and claiming every legitimate expense is so important.

Filing Your Tax Return

Your self-assessment tax return is due by 31 January following the end of the tax year. For the 2025/26 tax year (which runs from 6 April 2025 to 5 April 2026), your tax return is due by 31 January 2027.

You will need to report your income on the self-employment pages of the tax return, including your total turnover, allowable expenses broken down by category, and your calculated profit.

For a detailed walkthrough, see our self-assessment guide.

VAT Registration

If your turnover exceeds the VAT registration threshold (currently £90,000), you must register for VAT. Most individual Uber and Deliveroo drivers will not reach this threshold, but if you do, our VAT registration guide explains the process.

It is worth noting that Uber itself is VAT registered, and VAT has been a complex issue for the ride-hailing industry. However, for individual drivers, the key consideration is simply whether your own turnover exceeds the threshold.

Common Mistakes to Avoid

Not registering as self-employed. This is the most common and most serious mistake. HMRC receives data from platforms like Uber and Deliveroo and will know if you have been earning without declaring it. The HMRC gig economy initiative specifically targets unreported platform income.

Not keeping records. You must keep records of all income and expenses for at least five years. Without records, you cannot support your expense claims if HMRC investigates.

Missing the filing deadline. Late filing attracts an immediate £100 penalty, with further penalties accumulating over time.

Not saving for tax. Set aside 25% to 30% of your profits throughout the year. Do not wait until January to discover you owe thousands of pounds that you do not have.

Overlooking expenses. Many drivers leave money on the table by not claiming legitimate expenses. Track everything and claim everything you are entitled to.

Making Tax Digital

From April 2026, Making Tax Digital for Income Tax Self Assessment is being introduced for self-employed individuals with qualifying income over £50,000. This means you will need to keep digital records and submit quarterly updates to HMRC using compatible software. Even if you are below the threshold currently, it is wise to start keeping digital records now. Our guide on Making Tax Digital explains everything you need to know.

Driving for Uber or Deliveroo can be a great way to earn money on your own terms. But treating the tax side seriously from day one will save you stress, penalties, and money in the long run. Get your records in order, claim every expense you are entitled to, and file your return on time.

Ready to make your tax admin as straightforward as your next delivery? Sign up for Accounted and let Penny track your income, categorise your expenses, and prepare your tax return, all from your phone.

Useful Resources

• running a limited company
• Health and Safety Executive guidance

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