Tax as a self-employed driver
Whether you work as a courier, taxi driver, or an HGV driver, there are often quite a few costs you have to pay for – like petrol or repairs. This money that you spend on running your business is known as ‘running costs’ or ‘expenses’.
This page will give you an overview of the different costs involved when working as a self-employed driver, to help you feel more in control of managing them and your tax.
What does ‘claiming expenses’ mean?
You may have heard of the phrase ‘claiming expenses’. If you’re self-employed, what this actually means is taking your expenses off your taxable profit when you send us your tax return. This makes your total profit smaller, so you owe less Income Tax.
Key thing to remember:
Taking off (or deducting) your allowable expenses reduces your tax bill, but you don’t claim the expenses back from anyone. You don’t get a refund or the money back.
Learn more about how tax returns work on our pages about Self Assessment and Making Tax Digital for Income Tax.
Using your actual running costs as expenses
When filling out your tax return, you can claim for your actual vehicle running costs. This includes fuel, insurance, repairs, servicing, and road tax.
To work out (and track) your running costs, you’ll need to work out what percentage of your total mileage is for business travel, then claim that percentage of your costs.
Using simplified expenses: Your mileage costs
If you use your own vehicle for your business, you can deduct a cost called a fixed rate per mile on your tax return, instead of your actual running costs. This is the simplest way to claim your vehicle costs – in fact, it’s often called ‘simplified expenses’.
Simplified expenses are straightforward to work out. Just write down your business miles for that tax year, then multiply that number by the mileage rate shown below. Next, take that amount off your profit.
The mileage rates:
| Vehicle | Rate per mile on or before 5 April 2026 | Rate per mile from 6 April 2026 |
|---|---|---|
| Cars and goods vehicles for the first 10,000 miles | 45p | 55p |
| Cars and goods vehicles after 10,000 miles | 25p | 25p |
| Motorbikes (no matter how many miles) | 24p | 24p |
You can find out more about calculating your mileage on GOV.UK.
Helpful tip:
Keep a simple log of every business journey in your phone, a notebook, or in a mileage-tracking app. Write when and where you went, and how far you travelled.
It’s important to know that only business journeys count – not any personal trips. And although it’s called a ‘mileage’ rate, simplified expenses are designed to cover running costs like fuel, too. So, you can’t also include those running costs as an expense on your tax return.
Key thing to remember:
Using simplified expenses is instead of using your running costs – you cannot do both. Once you choose a method, you need to stick with it for as long as you use that vehicle in your business.
You can find out more about simplified expenses on GOV.UK.
Other expenses you can claim
Whether you choose to use simplified expenses or your actual running costs, there are other business costs you can claim as well, like:
- parking fees
- tolls
- congestion charges for business trips
- reasonable food costs for overnight stays for work
- reasonable accommodation costs for overnight stays for work
- business-related mobile phone costs
You can find out more about what you can claim for on GOV.UK.
Some costs can’t be claimed
Any parking fines or speeding tickets don’t count as expenses, even if you got them while working. Everyday lunches and snacks during a normal working day don’t count either – everyone needs to eat, whether they’re working or not.
We’re here to help
It’s good to know what you can claim as an expense right from the start. You’ll find plenty more tips on this site to help fill any other gaps in your knowledge – like how to keep good records on this page.