Ride-Hailing Driver Expenses and CIS: Your Questions Answered

Ride-hailing driver expenses you can claim stay the same when you also take construction subcontracting jobs, but the paperwork gets harder. You now run two trades, one tax return, one vehicle, and a Construction Industry Scheme (CIS) deduction that behaves like tax already paid, not like a cost. This FAQ explains how to keep the two trades apart.

It is written for drivers who pick up site work on quiet days, and for site workers who drive in the evenings. If you only drive, start with our guide to ride-hailing driver expenses you can claim. If you only subcontract, see our CIS returns FAQ. This page covers the overlap.

Key takeaways

• CIS deductions are not an expense. They are advance payments towards your tax and National Insurance, and you claim them as credit on your return.
• Keep costs that belong to driving apart from costs that belong to site work, and split shared costs on a method you can explain in writing.
• One vehicle, one mileage log: record every journey once, label each as driving, site work or private, and total each label at year end.
• Choose one expense method per vehicle. Simplified mileage commits you to flat rates for as long as you use that vehicle in the business.
• Where HMRC guidance is silent on a split between two trades, check GOV.UK or ask an accountant before filing.

What is a two-trade expense split?

A two-trade expense split divides your allowable costs between your driving trade and your CIS subcontracting trade so each trade's profit is calculated on its own costs. Costs used by both, such as a shared van or phone, are apportioned on a reasonable, documented basis.

HMRC treats you as one person with one Self Assessment return. Even so, each self-employment has its own income, its own costs and its own profit, and the return reflects that. Splitting costs properly stops one trade from carrying costs it never caused. It also gives you a clean answer if HMRC asks how you reached a figure.

Can I claim the same expense in both trades?

No. You can claim each cost once, in the trade it belongs to, or split it between the two trades. Claiming the same £100 in full against both trades would double-count it and overstate your costs. HMRC expects a cost to be wholly and exclusively for business, or apportioned to its business share.

According to HMRC's guidance on expenses if you're self-employed, where you use something for both business and personal reasons you can only claim the business portion. The same logic applies when two businesses share one item. Each business gets its fair share and nobody gets the whole cost twice.

A practical test works well. Ask what the cost was for, who benefited, and what evidence you hold. A ladder bought for a bathroom job belongs to construction. A phone mount bought for the dashboard belongs to driving. A phone you use for both takes a percentage split, based on a sample month of usage you keep on file.

Which expenses belong to the driving trade and which to the construction trade?

Costs that exist only because of one trade belong to that trade. Driving costs include app service fees, passenger-related cleaning, and hire licence fees. Construction costs include tools, protective clothing and site materials you buy yourself. Shared costs, such as insurance covering both uses, are split.

The table below is a starting point, not a rule book. It shows where each common cost usually sits so you can build your own allocation sheet. Where a cost does not fit neatly, write down the reason for your choice on the day you pay it.

Are CIS deductions an expense?

No. CIS deductions are not an expense. A contractor takes them from your payments and passes them to HMRC, and they count as advance payments towards your tax and National Insurance bill. You report the amount deducted separately and set it against what you owe.

According to GOV.UK's CIS subcontractor guidance, a registered subcontractor normally has 20% deducted, and 30% if you are not registered. Your taxable profit is still based on your full invoices before the deduction, less genuine costs. The deduction does not reduce your profit.

This is the mistake we see most often. A driver sees £3,600 taken from a month's site payments, lists it under costs, and understates profit. HMRC then sees profit that does not match the contractor's records. The CIS FAQ linked at the top explains how deductions are reclaimed if they exceed your bill.

Do I need one mileage log or two?

Keep one mileage log per vehicle, with every journey labelled by purpose: driving, construction or private. You do not need two physical logs. You do need to be able to show, journey by journey, which trade a mile belongs to and which miles were private.

A single log is easier to audit because the odometer readings run in one unbroken sequence. Two separate logs for one vehicle invite gaps and overlaps, where the same drive appears twice or not at all. Our guide to mileage log records and bookkeeping shows a suitable layout.

• Record the date, start and end odometer reading, start and end place, and purpose for every journey.
• Add a trade label at the time of the journey, not months later.
• Log site-to-site journeys and trips between a base and a temporary site separately from your normal home-to-regular-site commute.
• Save the year-end totals for each trade and for private use in your records.

What happens when the same van or car works for both trades?

You choose one expense method for that vehicle, claim business use only, and divide the business share between the two trades using your mileage log. HMRC's guidance says nothing specific about splitting one vehicle between two separate trades, so check GOV.UK or take advice before relying on any particular split.

According to HMRC's simplified expenses guidance for vehicles, the flat rates for 2026/27 are 55p per mile for the first 10,000 business miles and 25p after that, for cars and goods vehicles. The rate was 45p before 6 April 2026. The same page says that once you use flat rates for a vehicle, you must continue to do so while you use it in the business.

That commitment matters if the vehicle serves two trades. You cannot choose flat rates for driving and actual costs for construction on the same vehicle and expect that to be safe. Accountancy forums disagree on whether two trades each get their own 10,000-mile band, so we treat the band as one allowance per vehicle until GOV.UK confirms otherwise.

Does the 55p rate apply to the whole year?

The 55p rate applies to business miles in the 2026/27 tax year, which started on 6 April 2026. The 10,000-mile band is counted across the tax year, so miles before 6 April 2026 fall under the earlier 45p rate. Check the page on GOV.UK if your mileage straddles the date.

How do I split vehicle costs step by step?

Work out total business miles, label them by trade, apply your chosen method to the whole business total, and then divide the result by each trade's share of the miles. Remove private use first. Record your working so the numbers can be rebuilt later.

1. Download or export your mileage log for the tax year, from 6 April 2026 to 5 April 2027.
2. Total the miles into three groups: driving, construction and private.
3. Add driving and construction miles together to get business miles. Private miles never count.
4. Pick one method for the vehicle: simplified flat rate or actual costs. Do not mix them on the same vehicle.
5. If you use flat rates, apply 55p to the first 10,000 business miles and 25p to the rest. If you use actual costs, total fuel, insurance, servicing and repairs, then take the business-use percentage.
6. Divide the final business figure between the two trades using each trade's share of business miles.
7. Enter each trade's share in that trade's expenses and file a note of your working with the records.
8. Check anything unusual on GOV.UK, such as capital allowances if you have claimed them on the vehicle before.

Illustrative example: a driver who also subcontracts

This is an illustrative example using invented figures for a driver we will call Sam. Sam drives for a ride-hailing app in the evenings and works as a CIS subcontractor on residential repairs by day. One van is used for both. Sam drove 12,000 business miles in 2026/27: 7,000 for driving and 5,000 for site work.

Using the flat rates, the vehicle claim is 10,000 miles at 55p, which is £5,500, plus 2,000 miles at 25p, which is £500. The total is £6,000. Dividing by mileage share gives £3,500 for driving (7,000 of 12,000 miles) and £2,500 for construction (5,000 of 12,000 miles).

Sam's combined profit is £28,560. The £3,600 of CIS deductions does not appear in the cost lines. It is entered separately as tax already paid, then set against the Self Assessment bill. Sam still owes tax and National Insurance on the full profit, and the credit reduces the amount payable or may create a repayment.

Sam's phone split shows how to document a judgement. A sample month of call and data logs showed 70% of use for driving and 30% for site calls, once private use was removed. Sam kept the screenshots with the year's records. The percentage is the sort of working you should file, whatever your own split turns out to be.

Do I need two sets of accounts or one?

You need one Self Assessment return, but your records should show two trades clearly. Keep separate income and expense columns for driving and construction, even if your accounting software or spreadsheet produces a single combined report. HMRC asks for self-employment figures by business, so tidy records save time.

The return has self-employment pages for each business, and your CIS deductions are entered with the construction income. Check GOV.UK's deadlines page for the 31 January online filing deadline. If you have not filed before, register for Self Assessment by 5 October after the end of the tax year. Our software and CIS update covers choosing tools.

How do the trading allowance and VAT work across two trades?

The £1,000 trading allowance and the VAT threshold are each tested against your whole self-employment, not trade by trade, so combined turnover is what matters. The VAT registration threshold is £90,000 of taxable turnover. Both trades count towards it, so check your combined figure regularly.

The trading allowance replaces actual expenses: you cannot claim both the allowance and expenses against the same income, according to GOV.UK's expenses page. With real vehicle and tool costs, most drivers on two trades are better off claiming actual expenses. For VAT, GOV.UK's VAT registration page sets out the rules, and our VAT registration and CIS walkthrough covers how construction reverse charge rules can matter.

What are the common mistakes and the penalty each triggers?

The common mistakes are entering CIS deductions as an expense, claiming the same cost twice, mixing methods on one vehicle, and keeping a weak mileage log. Each one can lead to an enquiry, an amended return or a penalty for an inaccurate return, depending on how careless HMRC finds the error.

Penalties for inaccurate returns depend on behaviour: a careless error is treated more leniently than a deliberate one. We do not guess the percentage here. Check the current penalty rules on GOV.UK. If HMRC opens an enquiry, we recommend professional representation rather than replying alone.

How UK Driver Accountants helps

UK Driver Accountants works only with drivers, on fixed fees from £20 a month, and we are independent of any ride-hailing app. For drivers with CIS income, our CIS returns service keeps both trades, the deductions and the shared vehicle in one tidy set of records.

See our pricing page for the fixed fees, try the mileage calculator to test your own split, or read our self-employed ride-hailing driver CIS checklist before your next return. Employing helpers? See our payroll expenses guide.

Key terms

• CIS: Construction Industry Scheme, where contractors deduct tax from subcontractors' payments and pass it to HMRC.
• Subcontractor: a self-employed person who does construction work for a contractor.
• Simplified expenses: flat rates per business mile instead of tracking each running cost.
• Actual costs: claiming the real running costs of a vehicle, then taking the business share.
• Trading allowance: £1,000 of tax-free trading income that cannot be combined with claiming expenses.
• UTR: Unique Taxpayer Reference, the 10-digit number HMRC gives you for Self Assessment.
• NIC: National Insurance contributions.

Conclusion

Two trades do not need two of everything. They need one return, one honest mileage log per vehicle, a written split for shared costs, and a clear line between expenses and CIS credit. Get those four things right and the rest follows. Contact us and we will set up the split with you.

This article is general information and is not personal tax advice. Your position depends on your own facts, so speak to a qualified accountant before acting. If HMRC opens an enquiry or proposes a penalty, professional representation is recommended.

Last reviewed 7 November 2026 by the UK Driver Accountants tax team