Quick answer
Uber drivers are treated as self-employed for tax, so you must register for Self Assessment, report your fares, and pay Income Tax and National Insurance on your profits. You can reduce the bill by claiming allowable costs such as fuel, insurance and vehicle expenses.
Updated October 2026 · Figures based on 2026/27 rates
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Registering and records
Register with HMRC as self-employed and keep trip records, Uber statements, fuel receipts and mileage. Uber’s annual summary helps but does not replace your own records.
Allowable expenses
Fuel or mileage allowance, vehicle insurance, MOT, repairs, licence and PCO costs, congestion charge and parking, phone costs and accountancy fees.
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VAT
Private hire drivers must register for VAT once taxable turnover passes the £90,000 threshold. Your total fares, not your profit, count towards that limit, so check your position early — see HMRC’s VAT registration guidance.
Paying the tax
Set aside part of each week’s earnings and file by 31 January. Payments on account may apply after your first full year.
How Uber drivers are taxed
Uber drivers are normally treated as self-employed for tax purposes. That means the income you earn is not taxed at source, and you are responsible for reporting your profit on a Self Assessment return and paying the tax yourself. The tax is worked out on profit, not on the fares you take. Profit is your total takings less allowable business expenses, and the result is taxed at the usual income tax rates after your Personal Allowance of £12,570. You also pay Class 4 National Insurance at 6% on profits between £12,570 and £50,270, and 2% above that. Compulsory Class 2 National Insurance no longer applies, but if your profit is at or above the Small Profits Threshold you are treated as having paid it for state pension credit purposes.
Two details catch many new drivers out. First, your takings are the full fares before the Uber service fee comes off, and the fee is then claimed as an expense. Second, if your total taxable turnover goes over the VAT registration threshold, you must register for VAT, so keep an eye on your running total. Our guide to VAT registration for sole traders explains the rules. For the wider picture on this type of work, see our tax return guide for taxi and private hire drivers.
Choosing between mileage rates and actual costs
Most drivers face a choice about how to claim the cost of the car. You can claim simplified mileage rates, which are 45p a mile for the first 10,000 business miles in the tax year and 25p a mile after that. These rates are meant to cover fuel, insurance, servicing and wear and tear, so you cannot claim those costs separately as well. Alternatively, you can claim the actual running costs, with the business proportion of fuel, insurance, repairs and so on, and claim capital allowances for the purchase of the car itself. Once you have chosen a method for a vehicle, you generally need to stick with it, so think about it at the start. Our guide to the 45p and 25p mileage rates goes into more detail.
Worked example: comparing the two methods
This is an illustrative example that ignores capital allowances on the car to keep the comparison simple. A driver in England takes £38,000 in fares in the year, pays £7,600 in Uber service fees, £450 for a licence and £360 for a phone, and drives 30,000 business miles.
| Actual costs | Mileage rates | |
|---|---|---|
| Fares | £38,000 | £38,000 |
| Uber fee, licence, phone | £8,410 | £8,410 |
| Fuel, insurance, repairs | £4,800 + £2,200 + £1,100 = £8,100 | none claimed separately |
| Mileage claim | none | 10,000 x 45p + 20,000 x 25p = £9,500 |
| Profit | £21,490 | £20,090 |
| Income tax at 20% | £8,920 x 20% = £1,784.00 | £7,520 x 20% = £1,504.00 |
| Class 4 NI at 6% | £8,920 x 6% = £535.20 | £7,520 x 6% = £451.20 |
| Total tax | £2,319.20 | £1,955.20 |
In this case the mileage method reduces the bill by £364, because the extra £1,400 of deductions is taxed at 26%. For another driver with a newer, cheaper-to-run car or fewer miles, the actual method could win. The only reliable way to know is to run both calculations.
Common mistakes
- Reporting only the money paid into your bank account after Uber has deducted its fee, instead of the gross fares.
- Claiming fuel and mileage rates for the same vehicle.
- Not keeping a mileage log, so the claim cannot be supported.
- Forgetting to set money aside. See our 31 January Self Assessment preparation plan.
- Ignoring the VAT threshold until it has already been passed.
- Missing the 5 October registration deadline for Self Assessment in your first year.
Practical checklist
- Download your annual earnings and fee summaries from the driver app.
- Record business mileage throughout the year.
- Keep receipts for licence, insurance, servicing, parking and tolls where claimable.
- Decide on mileage rates or actual costs before you file.
- Check your turnover against the VAT threshold regularly.
- Budget for the January bill and, if applicable, payments on account.
How SATR can help
Our qualified UK accountants understand the way ride-hailing income is reported. We can compare the claim methods, prepare your return and file it online, with a fixed fee from £199 + VAT. See our Self Assessment service for sole traders.
This is general information, not personal tax advice.
Frequently asked questions
Can I claim the cost of buying my car?
Typically through capital allowances, or mileage rates if you use simplified expenses.
Do I pay tax on Uber tips?
Yes. Tips are part of your trading income.
Can I claim the Uber service fee as an expense?
Yes. Report your gross fares as income and claim the service fee, along with other allowable costs, as an expense. Keep your Uber statements as evidence.
Do I need to tell HMRC if I only drive part-time?
Yes, if your self-employed income for the tax year is over £1,000 you generally need to register and report it, although the trading allowance of £1,000 may mean there is nothing to pay on small amounts.
Can I claim for time spent waiting for rides?
Costs of running the vehicle while you are working are generally covered by the mileage method or by actual costs. Which journeys count as business miles is a matter of HMRC guidance, so check it for your circumstances.
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The bottom line
Uber drivers are self-employed for tax: register for Self Assessment, report gross fares (before Uber’s fee), and pay Income Tax plus Class 4 National Insurance on your profit. Compare mileage rates against actual costs each year, watch the £90,000 VAT threshold on total fares, and keep a mileage log from day one.
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