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Top 10 Expenses You Should Claim from Your Tax as an Uber or Taxi Driver in the UK

Sep 14, 2022 | Tax & Accounting

For sure, being a Taxi driver in the UK, you have a lot of expenses. Read through this blog to know which expenses you should claim from your tax.

Taxi Driver Tax UK: Top 10 Expenses You Should Claim from Your Tax as an Uber or Taxi Driver in the UK

If you earn more than £1000 as an Uber driver, you may think about an Uber driver tax or how the Uber driver tax works. Even though there is some disagreement over whether Uber drivers are employed or self-employed, HMRC requires all drivers to record their earnings.

One of the advantages of paying your taxes yourself with a tax return is that you can claim a portion of the money you spend at work as expenditures. This is why Sterlinx Global provides you with actionable advice on how to claim back taxes. 

Taxi Driver in the UK
Top 10 Expenses You Should Claim from Your Tax as an Uber or Taxi Driver in the UK 5

1. Fuel Cost

You can reclaim 100% of the VAT paid on fuel used for business reasons. You must, however, be able to show that the fuel was utilized solely for work purposes and that no personal trips were conducted. Unless you own a cab company or a driving school, this is challenging. 

2. Toll fees

Toll fees are tax-deductible from taxi driver tax only if you travel for business purposes. HMRC deems a journey to be business-related if:

  • It’s a requirement of your position. For example, suppose you’re a lorry driver hauling items from an Essex warehouse to Edinburgh.
  • You must temporarily work somewhere other than your typical workplace. For example, suppose you’re working for a few days from a client’s office in another city. 

3. Car repairs/maintenance

If you use a car for business, you can claim the VAT you paid on repairs and maintenance as input tax. It makes no difference whether the car is used for personal purposes or whether you have elected not to claim VAT on-road fuel.

You cannot claim VAT on repairs as input tax if you are a sole proprietor or partner who uses a car purely for personal purposes.

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Top 10 Expenses You Should Claim from Your Tax as an Uber or Taxi Driver in the UK 6

4. Annual Road Tax Cost

If you use your vehicle only for work, you may be eligible for tax reduction. You may be able to claim a tax reduction on the allowed mileage rate if you use your vehicle for business. This takes care of the costs of owning and operating your automobile.

You’ll need to do the following to figure out how much you can claim for each tax year:

  • Keep track of the dates and distance of your business trips.
  • Add up the mileage for each vehicle type you’ve driven for work and subtract any reimbursements your employer gives you for your expenses (sometimes known as mileage allowance’).

5. Car wash or cleaning cost

The expense of car cleaning is usually included in the normal mileage fee. However, if you have additional car cleaning expenses as a result of your self-employment business (over and above what you would normally pay for), the extra car cleaning charges are deductible. 

6. Registration & License fees 

Uber drivers can claim tax relief on professional subscriptions or fees that must be paid to do a job, according to HM Revenue and Customs (HMRC). This category includes ARB annual retention fee payments. Such memberships are considered indispensable to the job but are wholly deductible. 

ra 45 Top 10 Expenses You Should Claim from Your Tax as an Uber or Taxi Driver in the UK
Top 10 Expenses You Should Claim from Your Tax as an Uber or Taxi Driver in the UK 7

7. Insurance fees

Your business’s public liability insurance is tax-deductible. As an ‘allowable expense,’ business insurance is one of the costs you can deduct when calculating your taxable profit.

You can deduct business expenses from your income when computing your taxable earnings for your tax return, such as insurance fees. As a business expense, public liability insurance is included in HMRC’s definition of permissible expenses and is tax-deductible.

8. Accountancy fees

Yes, the quick answer is yes. The HMRC permits businesses to claim a tax deduction for a portion of their accountant’s expenses. Please keep in mind that not all fees are tax-deductible due to the nature of accountants’ jobs.

Accountants help firms with a wide range of services, including completing corporate accounts and financial statements for the majority, if not all, of them.

9. Advertisement/Marketing (posting on sites and paying ads)

As an Uber driver, you are allowed to claim expenses for advertising in newspapers or directories as well as social media and bulk mail advertising. 

10. Membership fees (if a member of any taxi association)

If you need to pay professional membership fees to execute your job, you can claim a tax reduction. If being a member of a recognized professional group or learned society is relevant to your career, you pay annual subscriptions to them.

ra 48 Top 10 Expenses You Should Claim from Your Tax as an Uber or Taxi Driver in the UK
Top 10 Expenses You Should Claim from Your Tax as an Uber or Taxi Driver in the UK 8

Here is a list of recently asked questions about the Top 10 Expenses You Should Claim from Your Tax as an Uber or Taxi Driver in the UK

  • How do I claim? 

    You can claim your VAT when you complete your self-assessment online. All Uber drivers are required to register with HMRC to declare their taxes by October 5th. 

  • Can I deduct fines and penalties? 

    Penalties and fines – Fines and penalties for businesses are common. They cannot be claimed, whether they are from HMRC or other organizations. The rules must be obeyed. Businesses should not be breaking them, so they cannot be claimed against because they are not considered a necessary component of conducting business.

  • Is legal fees tax deductible? 

    Legal fees – this is a difficult one because certain legal bills are deductible while others are not. Loan fees, patent fees, and trademark fees are all deductible. Other legal fees, such as share capital, are not covered.

Conclusion

The sharing economy is indispensable to consumers, and Uber drivers should be knowledgeable about the different forms of expenses that are tax-deductible. In this article, we look at expenses that can be deducted from your tax bill to ensure you can sustain your profits and save on your taxes as an Uber driver.

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