Private Hire Driver Tax Guide: Uber, Bolt & Beyond

Whether you drive for Uber, Bolt, Ola, or any other private hire platform, you are classed as self-employed for tax purposes. This means you are personally responsible for reporting your earnings to HMRC and paying the correct amount of tax and National Insurance. The platform will not do this for you. This guide explains everything you need to know about your tax obligations as a private hire driver in the UK for the 2025/26 tax year.

Getting Set Up With HMRC

As soon as you start earning from private hire driving, you need to:

1. Register as self-employed with HMRC — do this within three months of starting
2. Receive your Unique Taxpayer Reference (UTR) number, which can take 2-4 weeks
3. Set up a Government Gateway account if you do not already have one
4. Start keeping records of all income and expenses from day one

If you fail to register, you could face penalties even if you did not owe any tax. HMRC takes a dim view of late registration, particularly when it appears deliberate.

What Counts as Your Income?

Your taxable income is the total amount paid by passengers, not the amount you receive after the platform takes its commission. For example, if a passenger pays £20 for a ride and Uber takes a 25% commission, your gross income is £20, not £15. However, you can claim the commission as an expense.

Most platforms provide annual tax summaries showing your total gross earnings, commission charged, and other relevant figures. Download these and keep them with your records.

Allowable Expenses for Private Hire Drivers

This is where you can significantly reduce your tax bill. You can claim expenses that are incurred wholly and exclusively for your private hire work:

Vehicle Costs — Two Methods

You must choose one of two methods and stick with it consistently:

Option 1: Simplified Mileage Rates (Recommended for Most Drivers)

• 45p per mile for the first 10,000 business miles
• 25p per mile for every mile over 10,000

Under this method, you cannot also claim for fuel, insurance, repairs, or servicing separately — the mileage rate covers all vehicle running costs. You can still claim for parking and tolls on top.

Option 2: Actual Costs

Claim the actual costs of running your vehicle, including:

• Fuel
• Insurance (business proportion)
• Servicing and repairs
• MOT costs
• Tyres and breakdown cover
• Vehicle finance interest (not the capital repayment)
• Depreciation (through capital allowances)

If you use the vehicle for personal journeys as well, you must calculate the business proportion based on mileage.

Other Deductible Expenses

• Platform commission: Uber’s service fee, Bolt’s commission, etc.
• Private hire licence: Council licensing fees and renewals
• DBS check: Criminal record check costs
• Mobile phone: The business proportion of your phone contract and data
• Phone mount and charger: Equipment used in the vehicle
• Car wash and cleaning: Interior and exterior cleaning for the vehicle
• Dashcam: If used for your private hire work
• Accountancy fees: The cost of having your accounts prepared
• Congestion charges and tolls: When incurred during working journeys

Common Mistakes Private Hire Drivers Make

1. Not registering as self-employed: HMRC can see platform payments — they will find out
2. Confusing gross and net income: You must report the passenger fare, not just what you received
3. Mixing mileage and actual costs: You cannot claim 45p per mile AND claim for fuel — pick one method
4. Forgetting to log miles: Without a mileage log, you cannot support your claim if HMRC enquires
5. Ignoring the trading income allowance: If your total self-employed income is under £1,000, you may not need to file at all
6. Not setting money aside for tax: A good rule is to save 25-30% of your net profit each month

HMRC Investigations Into Private Hire Drivers

HMRC has increasingly targeted gig economy workers, including private hire drivers, for compliance checks. Platforms are now required to share earnings data with HMRC under the UK’s implementation of DAC7 (the EU’s reporting directive for digital platforms). This means HMRC can cross-reference what platforms report with what you declare on your tax return.

The best protection against an enquiry is simple: keep accurate records, report all income, and claim only legitimate expenses. An accountant who understands the private hire industry can ensure your return is robust.

We Specialise in Private Hire Driver Tax Returns

At HS Global Accountancy, we prepare tax returns for hundreds of private hire drivers across the UK. We understand the platforms, the expenses, and the common pitfalls. Visit our private hire drivers page to learn more about our services, or get in touch for a personalised quote.