Are you in? It’s your takings, not your profit
Add up all your fares for the 2025/26 tax year – app fares at the full amount before the platform fee, cash and card fares from the rank or your firm, and tips – before taking off any costs. If that total (plus any rent from property you let) is over £30,000, MTD applies from 6 April 2027. Over £50,000 and you have been in since April 2026.
Over £50,000
Over £30,000
Over £20,000
planned
Your work in accountant language
What actually happens in your working life, what your accountant and HMRC call it, and what to do about it.
| What happens | Accountant calls it | What you do |
|---|---|---|
| A passenger pays £24 for a trip through the app | Gross turnover | Record the full fare – your weekly app statement shows it. |
| The app keeps its service fee and pays you the rest | Expense – platform fees | Record the fee as an expense, not just the net payout. |
| A passenger tips you, in cash or in the app | Turnover (tips are taxable) | Add tips to your income. |
| You take cash fares from the rank | Turnover | Note each shift’s cash total before you finish. |
| You pay radio or circuit rent to your firm | Allowable expense | Keep the weekly receipts. |
| You fill up, pay the insurance or get the car serviced | Actual vehicle costs – or mileage instead | Pick one method per vehicle and stick to it; keep receipts or a mileage log. |
| You renew your council licence and badge | Allowable expense – licence fees | Keep the council receipt. |
| You take money out for living costs | Drawings – not an expense | It doesn’t reduce your tax. |
| Every three months / after 5 April | Quarterly update / final declaration | Send totals each quarter; finalise the year and pay by 31 January. |
What can a taxi driver claim?
✓ Usually allowable
- Platform service fees and commission (Uber, Bolt, FREENOW)
- Radio rent or circuit fees to your private hire firm
- Fuel, servicing, repairs, tyres, MOT and road tax – if you claim actual costs
- Private hire or hackney insurance
- Council driver and vehicle licence fees, medicals and DBS checks for licensing
- Vehicle rental if you hire your car weekly
- Car cleaning and valeting
- Phone and data – business share
- Congestion and clean-air zone charges while working, airport drop-off fees
- Accountant’s fees
✗ Not allowable
- Parking and speeding fines, and bus lane penalties
- Mileage rates and fuel for the same vehicle – it is one or the other
- Private use share of the car
- Meals and drinks on shift
- Money you take out for yourself (drawings)
Rules that matter for taxi and private hire drivers
Actual costs or mileage – choose once
You can claim the real costs of running the car (business share) plus capital allowances on the car itself, or use 45p a mile for the first 10,000 business miles and 25p after. Not both. Many full-time drivers do far more than 10,000 miles, so actual costs often come out higher – but whichever you pick, you generally keep using it for that vehicle.
Apps report your earnings
Since 1 January 2024, platforms like Uber and Bolt send HMRC details of what drivers earn. Your records should match the gross figures on your app statements.
Worker rights, self-employed for tax
App drivers may be classed as workers for things like holiday pay and the minimum wage, but for tax you are still self-employed and report your fares and costs yourself.
Buying the car
Under the cash basis, cars are not deducted when you buy them like other equipment. Instead you claim capital allowances, with the rate depending on the car’s emissions – electric cars usually qualify for the full cost.
Worked example
Imran drives private hire on Uber and Bolt in Birmingham (illustrative example)
| Takings (turnover) | £41,800 |
| less App service fees | −£9,900 |
| less Fuel or charging | −£4,600 |
| less Private hire insurance | −£2,400 |
| less Servicing, tyres, MOT and repairs | −£1,500 |
| less Licences, medical and DBS | −£450 |
| less Phone, cleaning and clean-air zone charges | −£950 |
| Profit | £22,000 |
| Income tax (estimate) | £1,886 |
| Class 4 National Insurance (estimate) | £566 |
| Total tax for the year | £2,452 |
| Put aside each month | £204 |
Estimate for 2026/27 using England, Wales & NI rates, assuming no other income. Scotland has different income tax bands.
What a quarterly update looks like
A typical quarter for a driver: download the weekly statements from each app, add cash fares from your notes, pull out the platform fees, add fuel, insurance and repair receipts (or your mileage log) – then submit through your software, or let your accountant do it. Downloading statements every Monday saves a painful afternoon later.
| Quarter | Period | Submit by |
|---|---|---|
| Q1 | 6 Apr – 5 Jul | 7 Aug |
| Q2 | 6 Jul – 5 Oct | 7 Nov |
| Q3 | 6 Oct – 5 Jan | 7 Feb |
| Q4 | 6 Jan – 5 Apr | 7 May |
| Final declaration | The whole tax year | 31 Jan following |
Quarterly updates are summaries – they don’t change when you pay. Tax is still due by 31 January (plus payments on account on 31 January and 31 July if they apply to you).
What will an accountant cost?
Typical monthly fees under MTD for Income Tax for: Sole trader, one business.
| Option | What you get | Per month |
|---|---|---|
| You do it yourself | MTD-compatible software. You keep the records and send the updates. | £0–£15up to £180 a year |
| Accountant files for you | You keep records in an app; they check them, send the 4 quarterly updates and the final declaration. | £30–£60about £360–£720 a year |
| Full service | They do the bookkeeping too – you share receipts and bank feeds, they handle the rest. | £60–£120about £720–£1,440 a year |
What pushes the price up: lots of transactions every month, or more than one income stream; records kept on paper rather than in an app; being VAT-registered; catching up on missed updates or late returns.
What a fixed-fee quote should include
- All 4 quarterly updates and the final declaration (your tax return)
- The MTD software licence – or whether you pay for it separately
- Whether they do the bookkeeping or only check what you’ve recorded
- A reminder before each deadline and an estimate of the tax to put aside
- Whether VAT (20%) is added on top – not every practice charges it
Accountancy fees for your business are an allowable expense, so they reduce your tax bill.
Indicative ranges from published UK price lists, checked October 2026. Not a quote – your fee depends on how many transactions you have, how tidy your records are and where you live.
Questions taxi and private hire drivers ask
Uber only pays me the net amount. What’s my turnover?
The full fares before Uber’s fee. The fee is an expense. Your profit comes out the same, but MTD is decided by the full fares.
Should I use mileage or actual costs?
It depends on your car and how far you drive. High-mileage drivers often find actual costs better. Work it out for your first year with a vehicle, as you usually can’t switch later for that car.
Do I declare cash tips?
Yes. Tips are part of your self-employed income.
I rent my car by the week. Can I claim it?
Yes. Weekly rental for a car you use to work is an expense (business share), along with the fuel you pay for.
Sources
- Find out if and when you need to use Making Tax Digital for Income Tax – GOV.UK
- Work out your qualifying income for Making Tax Digital for Income Tax – GOV.UK
- Send quarterly updates using Making Tax Digital for Income Tax – GOV.UK
- Find software that works with Making Tax Digital for Income Tax – GOV.UK
- Penalties for Making Tax Digital for Income Tax – GOV.UK
This guide is general information about HMRC’s Making Tax Digital rules as of 26 October 2026, not tax advice. MTD Match is an independent introduction service and is not affiliated with HMRC. Check gov.uk or speak to an accountant about your own situation.