Tax Guide for Uber Drivers: Self Assessment and Expenses

The Accounted Business Team·15 February 2026·7 min read

You Drive for Uber — Now HMRC Wants Their Share

If you drive for Uber, you are self-employed. That is not an assumption or a grey area — the UK Supreme Court confirmed in 2021 that Uber drivers are workers, but for tax purposes, Uber still treats you as a self-employed contractor. You receive no PAYE deductions. HMRC expects you to register as a sole trader, keep records, and file a Self Assessment tax return each year.

This guide covers exactly what you need to know for the 2025/26 tax year.

Your Self-Employment Status

Uber does not employ you. It provides a platform that connects you with passengers. You choose your own hours, use your own vehicle, and bear your own costs. This means you are responsible for paying your own Income Tax and National Insurance contributions.

You must register with HMRC as self-employed within three months of starting to drive. If you are already registered from a previous tax year, you do not need to register again. Your Unique Taxpayer Reference (UTR) number stays the same.

What Counts as Income

Your taxable income is the total fare amount Uber pays you — before Uber takes its commission. This is important. If a passenger pays £20 for a ride, Uber takes its 25% cut and pays you £15. But your gross income for tax purposes is the full £20. You then claim the Uber fee as a business expense. The end result is the same, but you need to record it correctly.

Download your annual tax summary from Uber's driver portal. It breaks down your gross fares, Uber service fees, and net earnings. Use the gross figure as your income.

Tips

Tips received through the Uber app or in cash are taxable income. Declare all tips on your tax return. In-app tips appear on your Uber statements. For cash tips, keep a record of approximate amounts.

Your Biggest Deduction: Vehicle Costs

Vehicle costs are the largest expense for most Uber drivers. You have two options for claiming them.

Option 1: HMRC Simplified Mileage Rates

45p per mile for the first 10,000 business miles
25p per mile after that

This flat rate covers everything — fuel, insurance, road tax, servicing, depreciation, tyres, and breakdown cover. You cannot claim any of those separately if you use this method.

For a full-time Uber driver doing 30,000 business miles a year, the mileage deduction would be (10,000 x 45p) + (20,000 x 25p) = £4,500 + £5,000 = £9,500.

Option 2: Actual Vehicle Costs

Claim the actual cost of running your vehicle:

Fuel
Insurance (hire-and-reward or private hire insurance — standard insurance does not cover Uber driving)
Road tax
MOT
Servicing and repairs
Tyres
Finance interest (not the capital repayment on a loan or HP agreement)
Depreciation or capital allowances on the purchase price
Breakdown cover

If you also use the vehicle for personal journeys, you must calculate the business-use percentage and claim only that proportion. Keep a mileage log for a representative period to establish your business-use percentage.

Which Method Is Better?

Once you choose a method for a particular vehicle, you must stick with it for the life of that vehicle. For high-mileage drivers with an efficient car, the mileage rate often works well. For drivers with expensive cars or high finance costs, actual costs may give a larger deduction. Run both calculations before choosing.

Uber Service Fee

The commission Uber deducts from each fare — typically 25% — is a deductible business expense. This is one of your largest costs. Your Uber annual summary shows the total service fees for the year.

Other Expenses You Can Claim

Private Hire Licence

The cost of obtaining and renewing your private hire driver licence (TfL licence in London, or your local council licence elsewhere) is fully deductible. This includes the DBS check, medical examination, and any required training courses.

Phone and Data

Your smartphone is essential for the Uber app and navigation. Claim the business proportion of your phone contract, or the full cost of a dedicated work phone. Phone mounts, charging cables, and in-car chargers are claimable too.

Sat Nav and Dash Cam

A dedicated sat nav or dash cam purchased for work is a deductible expense. If it costs more than £1,000, it may need to be treated as a capital allowance rather than a revenue expense, though most sat navs and dash cams are well below this.

Vehicle Cleaning

Keeping your car clean is important for your Uber rating. Car washes, valeting, and interior cleaning products are all claimable business expenses.

Congestion Charge and ULEZ

The London Congestion Charge and Ultra Low Emission Zone charge for business journeys are deductible. If you drive in the congestion zone every day for work, that adds up to a substantial expense. Note that a penalty for failing to pay the charge on time is not deductible — only the charge itself.

Insurance

Private hire insurance is essential and fully deductible. Public liability insurance is also claimable. If your policy covers both personal and business use, claim only the business proportion.

Bottled Water and Mints

Small items you provide for passengers — water, mints, phone chargers — are deductible as business expenses.

Expenses You Cannot Claim

Parking fines and speeding tickets — penalties for breaking the law are never deductible
Food and drink for yourself — HMRC treats your own meals as a personal expense
Clothing — ordinary clothes you could wear outside work are not deductible (but a branded uniform would be)
Commuting — if you drive from home to a fixed base before logging on to the Uber app, that journey is commuting, not business travel

The £1,000 Trading Allowance

If your total self-employment income is £1,000 or less in the tax year, you do not need to register or file a return. This is unlikely to apply to regular Uber drivers, but may be relevant if you only drove a handful of times.

How Much Tax Will You Pay?

Your taxable profit is your total gross fares minus all allowable expenses. Tax is then calculated as follows:

Personal Allowance: £12,570 tax-free
Basic rate: 20% on profits from £12,571 to £50,270
Higher rate: 40% on profits from £50,271 to £125,140
Additional rate: 45% above £125,140

Plus National Insurance:

Class 2 NI: £3.45 per week if profits exceed £6,725
Class 4 NI: 6% on profits between £12,570 and £50,270, 2% above that

Payments on Account

If your tax bill exceeds £1,000, HMRC will usually require payments on account — two advance payments towards next year's tax bill, each equal to half of the current year's bill. This can catch new drivers off guard. Budget for it from the start.

Record Keeping

You must keep records for at least five years after the 31 January filing deadline. That means:

Uber driver statements — download monthly and annual summaries
Mileage log — date, start/end odometer reading, business purpose
Receipts — fuel, insurance, licence fees, phone bills, cleaning, equipment
Bank statements — showing Uber payments into your account

Uber can change its driver portal or remove historical data, so download your records regularly rather than relying on the platform to keep them.

Filing Your Self Assessment

Your Self Assessment return for the 2025/26 tax year (6 April 2025 to 5 April 2026) is due by:

31 October 2026 if filing on paper
31 January 2027 if filing online

Online filing is strongly recommended. It gives you three extra months and HMRC calculates your tax automatically.

Staying on Top of It

Driving for Uber is straightforward. The tax side does not need to be complicated either. Register with HMRC, keep your records, claim every expense you are entitled to, and file on time. Tools like Accounted can connect to your bank, categorise your Uber income and expenses automatically, and Penny will flag anything that looks unusual. Start your free trial with Accounted today and let Penny handle the numbers while you focus on the road.

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