Allowable Expenses Taxi Drivers Can Claim (and How to Do It Right)

Every pound of legitimate expense you claim reduces the profit you pay tax on. Taxi and private-hire drivers have plenty of allowable costs — and missing them means overpaying HMRC. Here’s what you can typically claim, and the rules that trip people up.

The big vehicle decision: mileage or actual costs

This is the most important choice, because it’s where most of your money goes. You can either:

• Claim simplified mileage at a flat rate per business mile (a set rate for the first 10,000 miles and a lower rate after), which bundles fuel, servicing and wear-and-tear together; or
• Claim a business proportion of your actual running costs — fuel, insurance, repairs, servicing, tyres, and capital allowances on the vehicle.

You can’t mix the two on the same vehicle, and once you choose mileage for a vehicle you generally stick with it. For high-mileage drivers, actual costs often win; for lower-mileage or newer, efficient cars, mileage can be simpler and better. It’s worth modelling both.

Costs most drivers can claim

• Licensing — your taxi/private-hire driver licence and vehicle licence fees.
• Insurance — hire-and-reward / taxi insurance.
• App commission — the cut Uber, Bolt or your circuit takes is a business cost.
• Radio / circuit / dispatch fees.
• Vehicle cleaning and valeting.
• Mobile phone — the business-use proportion.
• Accountancy fees — yes, our fee is itself an allowable expense.
• Bank charges on a business account, and card-machine fees.

The grey areas

Some costs are only partly claimable. Your phone and, if you use actual costs, your vehicle, will have private use — you claim only the business share, so keep a sensible basis for the split. Ordinary everyday clothing isn’t claimable even if you wear it for work. Fixed penalty parking and speeding fines are never allowable.

Keep the evidence

Claims need records. Keep receipts, app statements and a mileage log. If HMRC ever asks, “I think it was about that much” is not an answer — but a photographed receipt is.

Don’t leave money on the table

Drivers who go it alone often under-claim out of caution, or over-claim out of guesswork — both cost you. We make sure you claim everything you’re entitled to, correctly, so your tax bill is as low as it legitimately can be.

Get taxi-driver accounts sorted — before MTD hits

Tax Digital helps taxi and private-hire drivers across Norwich, Norfolk and the wider UK keep clean digital records, claim every allowable expense and stay ready for Making Tax Digital for Income Tax. Fixed monthly pricing, no jargon, real people.

Talk to us about taxi-driver accounting  or see our accounting for taxi drivers page.

This article is general information, not personal tax advice. Figures reflect the 2025/26 tax year and can change — check your own position with us or HMRC before acting.