Driving trades and platform work produce the same return as any other sole trader, but two decisions dominate the arithmetic and both are made once and then lived with. The first is how to treat the vehicle: a flat mileage rate or the actual running costs. The second is whether the income is small enough to be covered by the trading allowance and left off the return entirely. Everything else is ordinary bookkeeping.
Mileage or actual costs, and why the choice sticks
You can claim a flat rate per business mile, which covers fuel, insurance, servicing, repairs and depreciation together, or you can claim the actual proportion of the vehicle's real running costs that relates to business use. You cannot mix them for the same vehicle, and having chosen the mileage basis for a vehicle you generally keep it for as long as you have that vehicle. Mileage suits a cheap, economical car doing high business mileage; actual costs suit an expensive vehicle, a leased one, or one with heavy repair bills. Work both out once, in the first year, because the decision is hard to unwind.
Platform income is income, whichever app pays it
Ride-hailing, delivery and courier platforms report what they pay, and their statements are the primary record of your turnover. What the platform pays you is not automatically your profit: their commission, and anything deducted before the money reaches you, are usually costs you can deduct, but they have to be recorded rather than netted off silently. Take the gross figure from the platform's statement as turnover and put the commission in as an expense, which is both correct and much easier to defend than a net number nobody can reconcile.
Side income, and the £1,000 that decides whether to bother
Trading income of £1,000 or less in a tax year is covered by the trading allowance and normally needs no report at all. Above it, everything is reported, and you may deduct the £1,000 instead of your actual expenses where that is better, which it often is for a side hustle with almost no costs. The threshold is on gross income, so it is measured before commission and before mileage, and a side hustle that turns over £1,500 is inside Self Assessment even if it made almost nothing.
The costs that are genuinely deductible for a driver
Beyond the vehicle: licensing and plate fees, private hire or operator fees, insurance specific to the trade, platform commission, phone costs on the business share, cleaning of the vehicle, and parking incurred on a job. Fines are not deductible, and neither is the cost of travel between home and a regular base of work. The personal share of anything used for both is apportioned rather than claimed whole, and the apportionment needs to be something you could explain.
Questions people ask about taxi driver tax return
Can I claim mileage and fuel receipts?
No. The mileage rate already includes fuel, insurance, servicing and depreciation. You choose one basis per vehicle and stay with it.
Is delivery work through an app self-employment?
Usually yes for tax, and the platform's statements are your turnover record. Employment status for other purposes can differ, but the return treats the income as trading income.
Do I have to declare a small side hustle?
Not if trading income for the year is £1,000 or less. Above that it goes on the return, and the trading allowance can be deducted instead of your actual expenses.
Are parking fines deductible?
No. Fines and penalties are never deductible. Parking paid legitimately while working is.