How to Complete a Self Assessment Tax Return as a Taxi Driver

Who Needs to Complete a Self Assessment Tax Return?

Most self-employed taxi and private hire drivers operate as sole traders. As a sole trader, you're responsible for declaring your business income and expenses to HMRC yourself.

You'll generally need to register for Self Assessment if your gross self-employed income is more than £1,000 in a tax year, unless a different rule or exemption applies. That £1,000 figure is income before deducting expenses, not your final profit.

You may also need to file a return if:

• You have income from more than one taxi or private hire business.
• You work for Uber, Bolt or another driving platform.
• You have income from employment as well as self-employed driving.
• You receive rental income, dividends, pension income or other taxable income.
• HMRC has specifically asked you to submit a return.
• You operate your driving business through a limited company.

Taxi licensing and tax registration are separate responsibilities. Holding a taxi licence doesn't automatically register you for Self Assessment, and registering for tax doesn't replace the need to maintain your local authority licence.

Self Assessment Deadlines You Need to Know

Missing a deadline can mean automatic penalties and interest. For the 2025/26 tax year (6 April 2025 to 5 April 2026), the key dates are:

Requirement	Deadline
Tell HMRC you need to file for the first time	5 October 2026
Submit a paper tax return	31 October 2026
Submit an online tax return	31 January 2027
Pay tax owed and first payment on account, if applicable	31 January 2027
Pay second payment on account, if applicable	31 July 2027

Step 1: Register as Self-Employed with HMRC

If you've started working as a self-employed taxi or private hire driver and haven't previously registered, you need to tell HMRC you require a Self Assessment tax return. You'll normally need your National Insurance number, full name, address and date of birth, the date you started trading, and your contact details.

After registering, HMRC will issue a Unique Taxpayer Reference (UTR). Keep it safe — you'll use it every time you deal with HMRC. If you've been self-employed before, you may already have one, but you should still check whether you need to notify HMRC for the relevant tax year.

Step 2: Set Up Your Records Before You Start

Don't begin your tax return by guessing figures from bank statements or trying to remember expenses from months ago. Prepare a summary first, covering:

• Total fares and other driving income, broken down by cash, card/contactless, and platform (Uber, Bolt, local operator).
• Tips, bonuses and incentive payments.
• Platform commissions and booking fees.
• Fuel or charging costs, insurance, repairs, servicing, tyres and MOT.
• Licensing, badge and medical fees.
• Phone and data, cleaning and valeting, accountancy, software and banking fees.

Back this up with receipts, invoices, bank statements, platform statements, mileage records, insurance documents, licence renewal paperwork, and any vehicle finance or lease documents. HMRC requires self-employed people to keep records of income and allowable expenses so they can calculate taxable profit accurately, and to retain them for at least 5 years after the 31 January submission deadline.

Step 3: Calculate Your Total Taxi Income

Your return should include all income from your taxi or private hire work for the relevant tax year — cash fares, card and contactless payments, app-based fares, airport transfers, school or contract work, corporate account work, local taxi office jobs, tips, platform bonuses, referral payments and incentive payments.

For platform work, check your driver statements carefully. Some platforms show gross fares, commissions, adjustments, refunds and net payments separately. A common mistake is declaring only the amount that lands in your bank account. If the platform deducts commission before paying you, you typically need to record the gross income and show the commission separately as a business expense — check your statements, or ask an accountant if you're unsure how a particular platform's payments should be treated.

Step 4: Calculate Your Allowable Expenses

Allowable expenses reduce your taxable profit, provided they're genuine business costs relating to your taxi or private hire work — fuel or charging, repairs and servicing, taxi insurance, breakdown cover, MOT and taxi tests, vehicle tax and licensing, driver badge and licence fees, required medicals, radio hire or operator fees, app and booking commissions, cleaning and valeting, business-journey parking and tolls, business-use phone and data, accounting fees, business bank charges, and advertising or website costs.

Don't claim a personal expense simply because you paid it from a business account — the purpose of the cost matters more than which account paid for it. For the full list with HMRC-specific detail on mileage rates and capital allowances, see our companion guide: Allowable Expenses for Taxi & Private Hire Drivers.

Step 5: Deal With Vehicle Expenses Correctly

Vehicle costs are usually your biggest expense, so they need careful treatment. You generally have two options, and you can't mix them for the same vehicle in the same year:

Option 1: Actual vehicle costs

Calculate the business proportion of the vehicle's real running costs — fuel or charging, insurance, repairs and servicing, MOT, vehicle tax, cleaning, breakdown cover, lease costs or finance interest, and capital allowances where applicable. If you also use the vehicle privately, you must strip out the private-use proportion — for example, if your mileage log shows 85% business use, restrict the relevant costs to 85%.

Option 2: Simplified mileage expenses

Use HMRC's approved mileage rate for qualifying business mileage, backed by an accurate mileage log showing date, journey, purpose and business miles. You can't also claim the running costs it's meant to cover. Some vehicle types and taxi arrangements don't qualify for simplified expenses, so check current HMRC rules — or our mileage allowance guide — before choosing.

Step 6: Complete the Main Tax Return (SA100)

The main return asks for your personal details, employment income (if any), pension income, benefits, bank interest, dividends, foreign income where relevant, student or postgraduate loan details, charitable donations, and other taxable income. Even if taxi driving is your main income, don't leave out other income like PAYE employment earnings — it all needs to be included.

Step 7: Complete the Self-Employment Section

You'll normally add the self-employment pages to report your taxi or private hire business: business name, description, start date, accounting period, turnover, allowable expenses, net profit or loss, and details of vehicles/capital allowances or payments to subcontractors where relevant. A suitable business description is simply "self-employed taxi and private hire driver."

The figures here should match your own income and expense summary from Step 2. Don't enter your full bank deposits as turnover without checking what they represent — statements can include transfers between your own accounts, refunds and personal payments that aren't taxi income.

Step 8: Check Your Profit Calculation

The basic calculation is: business profit = total business income − allowable business expenses. For example, total taxi income of £42,000 minus £19,000 of allowable expenses gives a taxable business profit of £23,000. Your final tax bill won't automatically be a fixed percentage of that figure — your personal allowance, tax band, National Insurance, other income and pension contributions all affect the result.

Before submitting, check for missing income, duplicated expenses, incorrect private-use adjustments, incorrect mileage totals, platform commissions counted twice, personal costs claimed as business expenses, and previous losses or payments on account.

Step 9: Review the Tax Calculation

HMRC's online system produces an estimated calculation covering Income Tax, Class 4 National Insurance where applicable, payments on account, tax already deducted through PAYE, and any balancing payment or credit. Read it carefully rather than assuming the final figure is right. An unexpectedly high bill is often caused by missing expenses, declaring net rather than gross platform income, forgetting PAYE tax already paid, or payments on account being added on top of the balancing payment.

Step 10: Submit and Keep Confirmation

Once you submit online, save the confirmation, note the date and time, download a copy of the return and tax calculation, keep your receipts and records securely, and put the payment deadline in your calendar. Submitting the return does not pay your tax bill — payment is a separate step.

Step 11: Pay Your Self Assessment Bill

Payment is usually due by 31 January, with a second payment on account (if applicable) by 31 July. You can pay by online bank transfer, Direct Debit, debit or credit card, or another method HMRC lists. Leave enough time for a bank transfer to clear — don't leave it until the final evening. If you can't pay in full, contact HMRC as soon as possible; ignoring the bill risks additional interest, penalties and collection action.

What Are Payments on Account?

Payments on account are advance instalments towards your next Self Assessment bill, usually split between 31 January and 31 July. For example, if your relevant tax bill is £4,000, HMRC may ask for £2,000 towards that year's balance by 31 January, plus £2,000 as the first payment on account for the following year — and another £2,000 by 31 July. Your exact figures may differ, particularly if you have PAYE income or Student Loan deductions.

This is why a first Self Assessment bill can look surprisingly large: it often includes both the balancing payment for the year just ended and an advance instalment for the year ahead, all due on the same date. Budget for this in advance.

How to Make Self Assessment Easier Next Year

1. Record income from every platform, operator and payment method as you go.
2. Keep a separate folder — physical or digital — for receipts and invoices.
3. Update your mileage record weekly, not from memory in January.
4. Reconcile bank and app payments every month.
5. Set aside money for tax as you earn it, rather than all at once.
6. Review your figures before the end of the tax year, not after.
7. Submit early rather than waiting for the deadline.

Digital bookkeeping software can help organise receipts, categorise expenses and track income — but it doesn't decide whether an expense is allowable, so check unusual or high-value costs carefully.

Frequently Asked Questions