Self Assessment Tax Return in Nottingham: Complete Guide to Licensing Costs

On a Self Assessment tax return, a Nottingham driver can usually claim licence costs tied to the driver, such as the badge fee and required medical, even on the mileage rate. Vehicle test costs are different, because HMRC says the flat rate already covers the MOT. That split is the part most guides skip, and it can change the figure you enter.

This complete guide takes the fees published by Nottingham City Council and neighbouring councils and shows where each one lands on your return. We do not repeat the mileage rules here, because our Nottingham mileage allowance guide covers them. Questions about choosing an accountant are answered in our Nottingham taxi driver accountant FAQ.

Key takeaways

• Split local costs into driver-side and vehicle-side. Driver-side costs are normally claimed on top of the mileage rate. Most vehicle-side costs are not.
• HMRC names the MOT as covered by the flat rate, so Nottingham's £75 vehicle MOT should not be added to a mileage claim.
• HMRC does not name the council vehicle licence fee in its list. We treat it as a grey area and explain the choice below.
• A refundable plate deposit is not an expense while you expect it back. A refund of a fee you already claimed generally is income.
• Enter what you actually paid in that tax year. Today's fee table may not match the fee you paid last year.

What is a Self Assessment tax return?

A Self Assessment tax return is the yearly report a self-employed driver sends to HMRC (His Majesty's Revenue and Customs). It shows your fares and other business income, less allowable expenses. HMRC uses the resulting profit to work out your Income Tax and National Insurance.

Licensing costs are one small part of that report, yet they are the part most specific to where you are licensed. A driver in West Bridgford and a driver in Bulwell may live a few miles apart and pay different councils different sums. Your Nottingham driver hub has wider local information.

Which Nottingham licensing costs go on a Self Assessment tax return?

Most Nottingham licensing costs can go on your Self Assessment tax return, but not all in the same way. Driver costs such as the badge fee, topography test and medical are normally claimed separately. Vehicle costs depend on your method, because the mileage rate already covers some of them. Deposits are not expenses at all.

The table below uses the taxi licensing fees published by Nottingham City Council, read on 1 November 2026. The treatment columns are our working view. HMRC does not publish a list for these specific local fees, so check with an accountant if a sum matters to you.

Costs paid to someone other than the council

Not every licensing cost reaches you on a council receipt. The council's driver licence page sends applicants to outside providers for the enhanced DBS (Disclosure and Barring Service) check, driving assessment, medical and safeguarding course. Nottingham also says drivers should keep up a DBS online service subscription so six-monthly checks can run. Check current prices with each provider, and keep every receipt, because they will not appear on any council statement.

Does the mileage rate already cover your licence and plate fees?

The mileage rate covers the costs of buying, running and maintaining the vehicle, including the MOT. It does not cover your own driver licence, because that fee is about you rather than the car. The vehicle licence fee is less clear, since HMRC names neither it nor plate charges when listing covered costs.

HMRC's Business Income Manual entry on motor vehicles gives the 2026/27 rates as 55p a mile for the first 10,000 business miles and 25p after that, with 45p applying before 6 April 2026. It says the rate covers fuel, oil, servicing, repairs, insurance, vehicle excise duty and MOT. It also says the deduction covers spending on the acquisition, ownership, hire, leasing or use of the vehicle.

That wording is why we call the vehicle licence fee a grey area. One view is that a plate fee is a cost of using the car as a licensed vehicle, so the rate covers it. The other is that it is a trade licence rather than a motoring cost. We take the cautious approach by default, and we only claim it separately after reviewing the driver's position.

Age makes this choice more relevant. The council's vehicle licence guidance says licences move from 12 months to six months as a car ages, and its age policy sets out the detail by vehicle type. Two six-month renewals cost the same in licence fees as one year, but the fee table attaches a £75 MOT to each application. On the flat rate you get no extra relief for that second test.

How do Nottingham's fees compare with neighbouring councils?

Nottingham's published fees are lower than Gedling's for a driver licence and differ from Broxtowe's and Rushcliffe's in structure. The comparison matters because the tax treatment follows what each council charges for. Gedling separates its licence fee from its vehicle inspection, which makes the split on your return easier to see.

Sources: Gedling Borough Council's application fees, Broxtowe Borough Council's taxi charges and Rushcliffe Borough Council's taxi licensing fees. Rushcliffe's page carries no year label, so treat its figures as the latest shown rather than a confirmed 2026/27 schedule.

Moving licence can leave two sets of costs in one tax year. Keep each council's payments as separate lines in your records. Nottingham does not allow dual plating of its licensed vehicles, according to its vehicle licence guidance, so a change of authority needs planning. GOV.UK's tax check guidance also says you need a tax check when applying for a licence type you already hold with another authority.

When do you claim a three-year licence on your return?

Under the cash basis, you record a three-year licence in the tax year you pay for it, so the full £260 falls in one return. Under traditional accounting, the cost is normally spread across the years the licence covers. The cash basis is now the standard method for sole traders, according to GOV.UK.

GOV.UK's guide to the cash basis explains that you only record income or expenses when you receive money or pay a bill. Payment date is therefore what counts. A renewal paid on 2 April 2027 belongs in 2026/27, while one paid on 7 April 2027 belongs in 2027/28.

If you use traditional accounting, a £260 licence works out at about £86.67 a year. Tell your accountant which method you use, as the return asks for it. Do not choose a licence length for the tax timing alone, since relief at 26% is a small share of the fee.

How do new drivers claim costs paid before the first fare?

New drivers can usually claim qualifying licensing costs paid before the first fare by treating them as paid on the day trading starts. HMRC allows this for revenue costs paid within seven years before the trade begins. They then go into your first accounts, so you should keep receipts from the application stage.

The rule sits in HMRC's Business Income Manual at BIM46351 and BIM46355. It applies only to costs you could have claimed after starting, and only to the person who paid them and started the trade. On Nottingham's table, a new driver taking a three-year licence would pay £465 for the licence, topography test, driving test, safeguarding and medical, before any DBS or provider charges.

You must register for Self Assessment by 5 October after the end of the tax year you started. Our first tax return guide covers registration and your first filing in detail.

How to enter Nottingham licensing costs on your Self Assessment tax return

HMRC's SA103S notes for 2025/26 use box 12 for car, van and travel costs and box 19 for other allowable business expenses. If annual turnover is below £90,000, you may just enter your total expenses in box 20. The steps below still matter, because your records must support that single figure.

1. Gather every licensing payment made between 6 April and 5 April, using council confirmations, card statements and provider receipts.
2. Mark each payment as driver-side, vehicle-side, deposit or refund. A simple spreadsheet column is enough.
3. Confirm your vehicle method. Once you use the flat rate for a car, you must stay on it for as long as you use that car in the business.
4. Remove the MOT and other covered running costs from your claim if you use the mileage rate, then decide on the vehicle licence fee with advice.
5. Add the driver-side costs to your other expenses, using box 19 if you complete the individual boxes. We use that box as a working convention, as HMRC's notes do not name these fees.
6. Leave refundable deposits out of expenses, and add any refund of a fee you previously claimed to your business income.
7. Check the total against your mileage log and bookkeeping records, then keep the papers for at least five years after the 31 January deadline, as GOV.UK requires.

Illustrative example: a Nottingham private hire driver's 2026/27 figures

This illustrative example uses an invented driver and our own figures. Marek holds a Nottingham licence, drives his own saloon as a sole trader and uses the mileage rate. He drove 22,000 business miles in 2026/27, renewed his three-year badge in June 2026 and needed a medical. His vehicle licence and MOT cost £285 that year.

Income Tax is £1,899.00, which is 20% of the £9,495 above the £12,570 Personal Allowance. Class 4 National Insurance is £569.70, at 6% of the same amount, using the 2026/27 rates on GOV.UK. His total for the year is £2,468.70.

Each licensing decision on his Self Assessment tax return has a price. Forgetting the £335 of driver-side costs would mean overpaying by £87.10, while wrongly adding the £75 MOT would under-declare tax by £19.50. If advice supported claiming the £210 vehicle licence fee, his bill would fall by £54.60 to £2,414.10. You can test your own numbers with our tax calculator.

His bill is above £1,000, so payments on account would normally apply, with instalments due by 31 January and 31 July. Our key tax dates guide sets these out. At £41,000 of fares he should also check how Making Tax Digital differs from Self Assessment. MTD for Income Tax applies from 6 April 2026 above £50,000 of qualifying income, £30,000 from April 2027 and £20,000 from April 2028.

What happens to deposits, refunds and grants?

Deposits, refunds and grants all need a closer look because money is moving back towards you. A refundable deposit is normally left out of expenses. A refund of a fee you previously claimed generally counts as income when received. Any vehicle grant should be checked with an accountant before you enter it on your return.

There is a local example of a refund. Gedling Borough Council's taxi refund scheme page says it overcharged for vehicle licences in certain years between 2016/17 and 2021/22, with refund values from nil to £34.86 per licence, and it invites drivers to apply. Sums like these are small, but a driver who claimed the original fee should keep the paperwork and record the receipt.

If you cannot trace whether you claimed the original fee, tell your accountant rather than guessing. The same applies to any help offered towards a cleaner vehicle, so ask before you enter it on your Self Assessment tax return.

Common mistakes and the penalty each one can trigger

• Adding the MOT on top of the mileage rate. This overstates expenses, and HMRC can charge a penalty for careless errors. Check GOV.UK for how those penalties work.
• Using a card payment date in the wrong tax year. This can shift profit between returns and create an error to correct, with possible interest.
• Treating a deposit as an expense. The claim overstates costs until corrected, so the same inaccuracy risk applies.
• Filing late. GOV.UK's Self Assessment penalties page lists £100 at first, then £10 a day from three months up to £900, then 5% of the tax due or £300, whichever is higher, at six and twelve months.
• Paying late. GOV.UK lists a 5% penalty on the unpaid tax at 30 days, six months and twelve months, plus interest. Different rules can apply once you are within MTD, so check GOV.UK.
• Leaving a renewal too long. This is not an HMRC penalty, but Nottingham says a driver renewal more than one month after expiry is treated as a new application, which means repeating the initial process and its costs.
• Failing to register by 5 October. HMRC can charge a penalty for late notification, so check GOV.UK if you have missed this date.

Key terms

• Cash basis: recording income and expenses when money actually moves, rather than when invoiced or billed.
• Combined licence: Nottingham's single driver licence covering both hackney carriage and private hire driving.
• Driver-side cost: a fee linked to you as a licensed driver, such as your badge or medical.
• Vehicle-side cost: a fee linked to the car, such as its plate, MOT or vehicle licence.
• Mileage rate: the flat rate per business mile, also called simplified expenses, that replaces actual vehicle costs.
• MTD: Making Tax Digital for Income Tax, HMRC's system of digital records and quarterly updates.
• Payments on account: two advance payments towards your next tax bill, due by 31 January and 31 July.
• Topography test: Nottingham's 45-minute test covering licence conditions, locations, numeracy, road signs and shortest routes.

How UK Driver Accountants helps

UK Driver Accountants works only with drivers and is independent of any ride-hailing app. We prepare your Self Assessment tax return through our personal tax service, sort your licensing costs, and explain any grey-area decision before filing. Fixed fees start from £20 a month, and our pricing page sets out what is included.

Get your licensing costs right before you file

With the 31 January 2027 deadline ahead, now is a good time to pull together your 2025/26 council receipts and sort them into driver-side and vehicle-side. A complete set of papers makes your Self Assessment tax return quicker and easier to defend. If you would like us to review your figures, contact our team.

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

This article is general information and not personal tax advice. Council fees change, so confirm current charges with your licensing authority, and speak to a qualified accountant about your circumstances. If HMRC opens a dispute or charges a penalty, we recommend professional representation.