Ride-Hailing Driver Expenses You Can Claim: A UK Guide for Self Assessment Clients

If you drive for a ride-hailing app, the ride-hailing driver expenses you can claim decide how much of your takings HMRC taxes. Every pound of allowable cost you record properly reduces your taxable profit, which is why the rules are worth learning.

This guide is for people who already know they need to file a Self Assessment return and want to get the expenses right. It covers the car, the licences, the phone and the paperwork, and it shows a worked comparison with real numbers. We do not repeat every line of our general allowable expenses list; instead we focus on choosing the right method and proving each claim.

Key takeaways

• An expense is claimable when it is incurred wholly and exclusively for your driving business. Mixed-use costs are claimable only for the business share.
• For your car you pick one route: simplified mileage (55p a mile for the first 10,000 business miles in 2026/27, then 25p) or actual running costs. Do not claim both on the same car.
• The choice is sticky. GOV.UK says that once you use flat rates for a vehicle, you keep using them for that vehicle.
• Your phone, licences, parking, tolls and accountancy fees are claimed separately from the car, whichever method you pick.
• A claim is only as good as its records. Keep a mileage log and receipts for every figure on your return.

What are ride-hailing driver expenses?

Ride-hailing driver expenses are the costs of running your driving business that HMRC lets you deduct from your fares before working out tax. They reduce your profit, not your tax bill directly, so a £100 expense saves you tax at your own rate on that £100, not £100.

According to HMRC's guidance on expenses if you are self-employed, allowable expenses do not include money you take out of the business for personal use, and when you use something for both business and personal purposes you can claim only the business part. That one idea, apportionment, is behind most of the rules below.

Key terms

• Allowable expense: a cost HMRC accepts as a deduction from business profit.
• Simplified mileage: a flat rate per business mile that replaces actual vehicle running costs.
• Actual costs: your real fuel, insurance, repairs and similar bills, reduced to the business share.
• Capital allowances: tax relief for buying a long-lasting item such as a car, instead of deducting the whole price at once.
• Apportionment: splitting a mixed-use cost between business and private use.
• UTR (Unique Taxpayer Reference): the 10-digit number HMRC gives you when you register for Self Assessment.
• Cash basis: recording income when you receive it and costs when you pay them; the default for most sole traders.

Which expenses can a ride-hailing driver claim?

You can claim the costs of running the car for work, the licences that let you work, your business phone use, parking and tolls, accountancy fees and a few smaller items. Each must be genuinely for the business and backed by a record. Private spending is never claimable, even if it is paid from your driving account.

The table below goes expense by expense and shows which car method each one belongs to. Treat it as a working checklist, and check GOV.UK before claiming anything unusual.

How do the car costs work for a ride-hailing driver?

You choose one of two methods for each vehicle: a flat rate per business mile, or your actual running costs scaled to business use. The car is usually your biggest expense, so this choice can move your profit by thousands of pounds. Pick it deliberately, not by default.

Simplified mileage in 2026/27

According to HMRC's guidance on simplified expenses for vehicles, cars and vans get 55p for each of the first 10,000 business miles and 25p for each mile after that, from 6 April 2026. The rate for the first 10,000 miles was 45p before that date.

The flat rate stands in for fuel, servicing, insurance, repairs and the cost of the car itself. You still claim parking, tolls and other travel costs on top. Our mileage calculator works out the claim from your log in seconds.

Actual costs

With actual costs you add up what the car really cost to run, then claim the share that relates to business miles. If 80% of your annual miles were for work, you claim 80% of fuel, insurance, servicing and similar bills. You also claim the purchase through capital allowances, discussed below.

Simplified mileage versus actual costs compared

Can I switch between mileage and actual costs?

Not freely. HMRC says that once you start using flat rates for a vehicle, you must keep using them for as long as that vehicle is used in your business. You also cannot use flat rates for a vehicle you have already claimed capital allowances on. Decide before your first claim on each car.

In practice, drivers who buy a new car and expect to cover very high mileage often prefer the flat rate, because it grows with each mile. Drivers with a costly, lower-mileage vehicle sometimes find actual costs plus allowances better. The worked example below shows how the numbers can fall.

What are capital allowances and do they apply to my car?

Capital allowances are tax relief for buying a long-lasting asset, spread over several years instead of deducted in one go. For a car, they replace simplified mileage. They only suit you if you choose actual costs, and relief is limited to the business-use share.

According to HMRC's guidance on capital allowances for business cars, cars do not qualify for the annual investment allowance. The main rate is 14% a year from April 2026 (it was 18% before), the special rate is 6%, and a 100% first-year allowance exists for new electric cars. Which rate applies depends on the car's CO2 emissions and when you bought it.

Because the rules depend on your car's emissions figure and purchase date, we check them for each client rather than rely on a headline rate. If you traded in or sold the car, there can also be a balancing adjustment, so tell us before you dispose of it.

Can I claim my phone, licences and other costs?

Yes. Your phone, your private hire licence and vehicle licensing, parking, tolls, accountancy fees and items for passengers are all claimable when they are for the business. These sit outside the car method, so you claim them whichever route you chose for the vehicle.

Phone and data

HMRC's own example is a phone bill split between business and private calls, where you claim the business portion only. Estimate your business share from a typical week of app use and keep that note with the bill. A single phone used all day for the driver app often has a high business share, but be honest and consistent.

Licences, checks and training

Licensing authority fees for your driver licence and vehicle licence are normally business costs. So can be refresher training that keeps your work skills up to date. The test is the same: is the money spent to earn fares? Keep every receipt, because licensing bodies and councils use different invoice formats.

Parking, tolls and charges

Parking and tolls on a fare are claimable on top of both car methods. A charge you pay because of a private trip is not. If you pay a daily charge for entering a zone both for work and for personal use, split it or claim only the work days, and check GOV.UK for the specific charge.

Accountancy, bank and software fees

Fees for preparing your business accounts and tax return are allowable. So are the charges on a separate business bank account. Keep invoices with the date, the amount and a description of the service. This is where a fixed monthly fee, such as ours, becomes a clear annual figure on your return.

Do the trading allowance and expenses work together?

No. You pick one. The £1,000 trading allowance and the expenses route are alternatives, and the allowance cannot be combined with an expenses deduction or capital allowances on the same income. Most drivers have far more than £1,000 of costs, so claiming real expenses normally wins.

According to HMRC's guidance on tax-free allowances on trading income, the allowance is £1,000 a year. It is more useful for small side earnings than for a full-time driver with a car, insurance and a licence.

How should I record my expenses, step by step?

Record every claim as it happens: log journeys when you drive, save receipts on the day, and reconcile the lot monthly. A tidy record turns the return into a short job and gives you proof if HMRC asks. The steps below are the routine we recommend to clients.

1. Decide your car method before the tax year starts, or before you first use the car for work, and note your reason.
2. Log every business journey with the date, start and end points and miles; our guide to a HMRC-ready mileage log shows the layout.
3. Photograph or download every receipt the day you get it and name the file by date and supplier.
4. Keep driving income and expenses in one place, ideally a business bank account used for nothing else.
5. Once a month, add up costs by category and check mixed-use items such as phone against your business share.
6. At year end, total your business miles and expenses and compare them with the figures from your app summaries.
7. File your return by 31 January 2027 for 2025/26 or 31 January 2028 for 2026/27, and keep your records; see GOV.UK on records for the self-employed for how long.

For a general view of what the year looks like, see our key tax dates for ride-hailing drivers. If this is your first return, our first tax return guide covers registration and the UTR.

Worked example: simplified mileage versus actual costs

A worked comparison shows how the method changes your profit. The figures below are an illustrative example for an invented driver. They are not a forecast, and your own numbers will differ.

Illustrative example: a full-time driver takes £42,000 in fares in 2026/27. They drive 26,000 miles in total, 22,000 of them for work. Running costs are fuel £4,200, insurance £2,400, servicing and repairs £1,300 and MOT and road tax £400, a total of £8,300. Other costs are phone £720 (60% business), licensing £400, accountancy £240, parking and tolls £310 and cleaning £180.

In this case simplified mileage gives £1,477 more deduction than actual costs, because the driver has high mileage and a modest running-cost bill. A driver with a newly bought car could see capital allowances tip the balance the other way. Tax and National Insurance depend on your whole position, so use our tax calculator for a rough view.

What are the most common mistakes and their penalties?

The most common mistakes are claiming both mileage and running costs, claiming private miles, and having no records. Errors can lead to an amended return, extra tax and interest, and penalties if HMRC finds careless or deliberate inaccuracy. The size depends on the behaviour, so check GOV.UK for current penalty bands.

If HMRC opens an enquiry or you receive a penalty notice, we recommend professional representation rather than replying alone. Our HMRC support service exists for that situation.

What if I drive through a limited company or use a leased car?

Simplified expenses are for sole traders and partnerships without a company partner. GOV.UK says limited companies cannot use them. A company can instead pay you approved mileage for use of a personal car, covered in our limited company mileage guide.

Leased cars sit under actual costs rather than flat rates. The rules can restrict lease payments on higher-emission cars, so check GOV.UK or speak to us before you sign a lease for work. If you are also unsure about registering for VAT on your takings, our VAT guide for ride-hailing drivers explains the £90,000 threshold.

How UK Driver Accountants helps

UK Driver Accountants works with drivers only, on fixed fees from £20 a month, and we are independent of any ride-hailing app. Our personal tax service reviews your car method, builds your expense schedule, prepares your return and files it with HMRC. See our pricing for the full fee picture.

We also compare the two car methods using your own mileage and costs before the year starts, so you are not guessing. We chase missing evidence early and tell you what will and will not stand up if HMRC asks.

Conclusion

The ride-hailing driver expenses you can claim are straightforward once you separate the car from everything else. Choose a car method on purpose, claim the business share of mixed costs, and keep a record for every figure. That discipline reduces tax, avoids penalties and makes filing quick.

Ready to get it right? Contact our team for a fixed-fee quote and a review of which car method suits your mileage.

Last reviewed 1 November 2026 by the UK Driver Accountants tax team.

This guide is general information and is not personal tax advice. Your circumstances may differ, so speak to a qualified accountant before relying on it. If HMRC disputes your return or issues a penalty, professional representation is recommended.