Tax for taxi and private-hire drivers

If you drive a black cab or a private-hire car, you're almost certainly self-employed — which means Self Assessment now, and Making Tax Digital soon. Here's what to claim and what to expect.

As a self-employed driver you pay tax on your profit — your takings after allowable costs — not on everything that comes in. If you earned more than £1,000 from driving in the tax year, you'll need to file a return.

Your car: two ways to claim

You pick one method per vehicle and stick with it:

• Simplified mileage — a flat rate of 55p per mile for the first 10,000 business miles and 25p after. Simple, and it already covers fuel, servicing and wear.
• Actual costs — fuel, insurance, repairs, servicing, tyres, road tax and so on, plus capital allowances on the vehicle itself. More paperwork, but often better for a car doing high mileage.

Costs specific to driving

• Your taxi or private-hire licence and vehicle plate fees.
• DBS checks and medical assessments needed to keep your licence.
• Circuit, dispatch or app fees — including the commission apps like Uber or Bolt take.
• Vehicle cleaning and valeting.
• Your work phone and data.
• Accountancy fees — including ours.

What about Making Tax Digital?

Many full-time drivers earn above the Making Tax Digital thresholds, so you'll likely need to keep digital records and send HMRC quarterly updates as it phases in from April 2026. That's exactly the sort of thing we take off your plate.

This guide is general information, not personal tax advice. Rates and allowances can change at each Budget — always confirm the current figures on GOV.UK or ask us to check your situation.