Ride-Hailing Driver Expenses You Can Claim: A Step-by-Step Guide for Drivers with Payroll

Ride-hailing driver expenses you can claim depend on which pot of income they belong to. If you also have a PAYE job or run a limited company with payroll, the same car journey can only be claimed once, and only in one place: your Self Assessment trading page, your employer's reimbursement, or your company's accounts.

This guide is for drivers with more than one income stream. If you only drive as a sole trader, read our full guide to ride-hailing driver expenses you can claim instead. Here we do not repeat the list of fuel, insurance and licence costs. We show you how to decide where each cost belongs, step by step, so that nothing is missed and nothing is claimed twice.

The rates quoted are for the 2026/27 tax year. Every rule below is tied to a GOV.UK page, and we say clearly where you should check the current figure yourself.

Key takeaways

• Each mile can be claimed once. A mile paid for by your employer or your company cannot also go on your trading page.
• For 2026/27 both the self-employed simplified rate and the employee approved rate are 55p for the first 10,000 business miles, then 25p, according to GOV.UK on simplified expenses and GOV.UK on vehicles you use for work.
• Journeys between home and a regular workplace are ordinary commuting, which neither route allows.
• If you use the £1,000 trading allowance on your driving income, you cannot deduct any expenses from it.
• A separate mileage log for each job or business makes every claim defensible.

What are ride-hailing driver expenses when you also have payroll income?

They are the costs of earning your fares that you pay yourself and that nobody else reimburses. Where an employer or your own limited company repays a cost, it is no longer your expense, and you claim only what is left unpaid. Each cost belongs in exactly one place.

Key terms

• PAYE (Pay As You Earn): the system an employer uses to deduct Income Tax and National Insurance from wages.
• Self Assessment: the yearly tax return where you report trading profit and any employee expenses.
• AMAP (approved mileage allowance payment): the tax-free per-mile amount an employer can pay for business journeys in your own car.
• MAR (mileage allowance relief): tax relief for the gap if your employer pays less than the approved amount.
• Trading allowance: £1,000 of gross trading income that can be tax-free, instead of deducting expenses.
• UTR (Unique Taxpayer Reference): the ten-digit number HMRC gives you for Self Assessment.

Which of your income streams does each expense belong to?

An expense belongs to the income stream it helps to earn. Costs of carrying fares go on the trading page. Costs of doing your PAYE job go to your employer or employee relief. Costs of running a limited company are claimed by the company, never by you personally on the same item.

GOV.UK says self-employed allowable expenses must relate to your business, and that shared costs only count for the business share (GOV.UK on self-employed expenses). The same logic applies to every stream you have.

How to decide where each expense goes, step by step

Work through these steps once at the start of the year and again whenever your work pattern changes. They stop the two most expensive errors for multi-income drivers: double claims and missed claims.

1. List every income stream you have this tax year: PAYE wages, ride-hailing profit as a sole trader, and any wages or dividends from a limited company.
2. Open a separate mileage log for each stream. Record the date, start and end postcode, miles and reason, as GOV.UK requires for employee mileage claims. Our guide to HMRC mileage log records and bookkeeping shows a practical layout.
3. Mark every journey with the stream it served. A fare belongs to the trading stream. A site visit for your employer belongs to the employer stream. A supplier run for your company belongs to the company.
4. Strip out commuting. A trip from home to a regular workplace is ordinary commuting and is not claimable under any stream.
5. Ask what each payer has already reimbursed. If your employer or company paid part of a cost, you can only claim the unpaid part, per GOV.UK on tax relief for employees.
6. Choose a car method for the self-employed car: simplified mileage or actual costs. Check the simplified expenses rules on GOV.UK before committing, because the choice sticks for that vehicle.
7. Check whether the £1,000 trading allowance suits your driving income better than deducting expenses. You cannot do both on the same income, per GOV.UK on the trading allowance.
8. Enter each stream's figures in its own section of the return, and keep your logs and receipts for each stream together.

What counts as an employee mileage claim compared with a self-employed one?

An employee claim covers business journeys in your own vehicle for your employer, and the relief is the approved rate less anything the employer paid. A self-employed claim covers journeys for your trade, deducted from profit. They use the same 2026/27 rates but sit in different parts of your tax affairs.

Employee mileage: the approved rate and the shortfall

According to GOV.UK's guidance on vehicles you use for work, the approved rate for cars in 2026/27 is 55p for the first 10,000 business miles and 25p after that. It was 45p before 6 April 2026. You take away what your employer pays you per mile, and relief is worked out on the difference.

If your employer pays more than the approved amount, the employer must report or tax the excess (GOV.UK on mileage rules for tax). If it pays less, you can claim mileage allowance relief on the unused balance. You can look back over the current year and the four before.

Self-employed mileage: simplified rate or actual costs

GOV.UK's simplified expenses page gives the same car rates for 2026/27. The flat rate replaces actual running costs such as fuel, insurance, repairs and servicing. You can still claim parking and other travel costs on top. Once you use flat rates for a vehicle, you must keep using them for as long as that vehicle is used in the business.

Cars designed for commercial use, such as black cabs, cannot use the flat rate. GOV.UK also says the flat rate is not available if you have already claimed capital allowances on the vehicle.

The two columns look alike, which is the trap. The same mile cannot appear in both. If your employer repays 25p and you travel 4,000 business miles for them, your own claim is limited to the missing 30p a mile, not the full 55p.

Can I claim the same expense twice?

No. A cost can be relieved once. If your employer reimburses it, your company pays it, or you deduct it as a sole trader, it cannot be claimed again anywhere else. HMRC compares your return with employer payroll data, so duplicated claims are easy to spot.

The common double claims are mileage plus fuel receipts, one phone bill claimed as an employee and a sole trader, and company-paid insurance also deducted on your trading page. Our limited company driver mileage guide covers the company side.

What if I run a limited company with payroll?

A limited company is a separate taxpayer. If it owns the car or pays for the car costs, the company claims them. If you use your own car for company business, the company can repay you at the approved rate, and you then claim nothing personally for those miles.

GOV.UK's mileage rules for tax say employers can pay up to the approved amount without tax (see GOV.UK on mileage rules for tax). A director on the payroll is an employee for this purpose, so check with an accountant how the approved rates apply to your own car. If the company owns the car and it is also used privately, a benefit-in-kind charge can arise.

Fares your limited company earns are the company's income, and fuel, insurance and servicing on a company vehicle are the company's costs. Do not also deduct them on your personal Self Assessment return. Our guide on setting up PAYE payroll for drivers explains how wages and company expenses fit together, and our limited company service page covers company accounts.

How do the trading allowance and expenses work together?

The trading allowance gives you £1,000 of gross trading income tax-free, but if you claim it you cannot deduct any other expenses on that income, per GOV.UK. If your real expenses are above £1,000, deducting them is usually the better route. Choose the method that gives you the lower taxable profit.

Because the allowance is a yearly choice for each income source, a driver whose PAYE job covers most costs and whose driving profit is small may find it useful. It cannot be used for income from your own employer or a company you control. If your situation is mixed, check GOV.UK or ask an accountant before choosing.

Which employee-only costs can I not put on my trading page?

Costs that exist only because of your PAYE job. Examples are uniforms, tools and professional fees you must buy for the job. They are claimed as employee expenses, and GOV.UK says that if you file Self Assessment, you must claim them through the return.

The rule on GOV.UK for employees is that you can only claim things you must buy for work, used only for work, and only the part your employer has not repaid. A licence fee you hold for fares belongs to the trade, not to the employer.

Illustrative example: one driver, three income streams

This is an illustrative example with invented figures, not a real driver. Priya (invented) works three days a week as a PAYE office coordinator, drives for ride-hailing apps in her own car on the other days, and holds a small limited company that she runs through payroll for consulting work.

For the employer miles, relief is worked out on the £1,050 gap. At the basic rate of 20%, that is £210 of tax relief, using the GOV.UK method. Priya's £4,950 reduces her trading profit, and the company's £660 is a company expense that she does not claim personally.

Priya cannot also claim fuel receipts on the 9,000 trading miles because the flat rate already covers fuel. She keeps three separate logs and one bundle of receipts for parking and tolls on paid fares. The totals here are illustrative and make no promise about your own tax saving.

To check your own figures, try our mileage calculator. It works out the rate on your business miles so you can compare it with your actual costs.

What are the most common mistakes and their penalties?

The most common mistakes are claiming the same cost twice, mixing employee and self-employed mileage, and missing records. Each can mean an HMRC enquiry and tax to repay with interest. Penalty amounts depend on the error and on how careless or deliberate HMRC finds it, so check GOV.UK for current rates.

Penalty levels and exact amounts change, so check the current amounts on GOV.UK. If HMRC opens an enquiry or issues a penalty notice, professional representation is recommended before you reply.

How UK Driver Accountants helps

UK Driver Accountants is an accountancy firm that works only with drivers, with fixed fees from £20 a month, and we are independent of any ride-hailing app. If you have PAYE income and driving profit, or a limited company with payroll, we split your costs across the right streams and prepare each return section.

Our payroll service sets up and runs payroll for limited company drivers, and our pricing page shows every fee in advance.

Conclusion

Being paid in more than one way does not mean claiming less. It means claiming each cost once, in the right place. Separate your logs, follow the steps above and compare the trading allowance with real costs each year.

If you want us to check where your costs belong, contact UK Driver Accountants for a fixed-fee quote.

Last reviewed 4 November 2026 by the UK Driver Accountants tax team.

This article is general information and is not personal tax advice. Speak to a qualified accountant about your own circumstances. If HMRC disputes a claim or issues a penalty, professional representation is recommended.