If you are a self-employed taxi driver, claiming the right expenses against your income is one of the most effective ways to reduce your tax bill. But getting your expenses wrong, either by overclaiming or by missing legitimate deductions, can create problems with HMRC. This guide lists every expense self-employed taxi drivers can typically claim.
Vehicle Expenses You Can Claim
You have two methods: the Simplified Mileage Allowance (45p per mile for the first 10,000 miles, then 25p) or Actual Costs (the business-use proportion of all running costs). You must choose one method per vehicle and cannot switch.
Fuel Costs for Taxi Drivers
With the actual cost method, claim the business proportion of your fuel costs. With the mileage allowance method, fuel is already included, so you cannot claim it separately.
Insurance and Licensing Fees
Taxi insurance (business proportion), council taxi licence fee, DBS check costs, badge fees, and vehicle plate fees are all claimable.
Phone, Apps, and Technology
Mobile phone (business proportion), sat nav or GPS app subscriptions, ride-hailing platform fees, card payment terminal fees, and dashcam costs are all deductible business expenses.
Other Expenses
Accountancy fees, uniform or branded clothing, vehicle cleaning, stationery and printing, home office costs, training courses, and professional memberships.
Common Expense Mistakes
Claiming personal mileage as business, mixing mileage allowance with actual costs, not keeping receipts, forgetting to claim legitimate expenses, and over-claiming without evidence.