From mileage claims and hire-and-reward insurance to your Self Assessment bill, here is your complete tax guide as a UK delivery driver.
The single biggest tax lever for a self-employed delivery driver is not what bracket you fall into; it is whether you are claiming mileage correctly. A driver covering 22,000 miles a year can deduct GBP 9,250 from their taxable income through HMRC's approved mileage rates alone, and yet a significant number of drivers on platforms like Amazon Flex, Evri, Just Eat and Deliveroo either claim nothing, claim a rough guess, or accidentally leave themselves exposed by using the wrong insurance policy.
This guide cuts through the noise for drivers who are paid per drop, per hour or per zone, juggling multiple apps at once, and wondering exactly what they owe HMRC and what they can legitimately claim back.
Whether you drive for one platform or four, HMRC treats all of your combined delivery income as self-employment income. You report it on a Self Assessment tax return each year, covering the tax year that runs 6 April to 5 April. The platforms you work for do not deduct income tax at source the way an employer would; you receive your full earnings and it is your responsibility to set money aside and pay what you owe.
Your taxable profit is your total delivery income minus your allowable expenses. On that profit, you pay:
Because the platforms pay you gross, your entire tax liability lands in one payment (or two payments on account). Many drivers are caught out by this in their first year. A simple rule: set aside roughly 25-30% of every payout while your profit stays in the basic-rate band.
If you earn delivery income alongside PAYE employment, HMRC can collect some of the tax through your tax code, but you still need a Self Assessment return. The multiple income tax calculator helps you see the combined picture before the January deadline arrives.
This is where your tax bill is genuinely won or lost. Every allowable expense reduces your taxable profit, which reduces both your income tax and your Class 4 NIC. The list below reflects what delivery drivers actually spend money on, not a generic self-employed checklist.
| Expense | Notes |
|---|---|
| Mileage (or actual vehicle costs) | 45p/mile for first 10,000 miles; 25p/mile above. Cannot also claim fuel, servicing or depreciation separately if using mileage rate. |
| Hire-and-reward / business use insurance | Standard personal car insurance does not cover delivery work. The additional premium for hire-and-reward cover is fully allowable. |
| Phone and data | Business proportion of your monthly bill. If delivery apps are your primary use, most of the bill is claimable; keep one month's bill as a record. |
| Thermal bags, delivery bags and equipment | Cold bags, pizza carriers, insulated boxes you buy yourself. Fully allowable. |
| Parking and tolls | Paid parking while completing drops, congestion charge, Dartford crossing and similar tolls. Keep receipts or use bank statements. |
| Breakdown cover | Roadside assistance is a genuine business cost when your vehicle is your income. Apportion if you use the same vehicle privately. |
| Platform fees | Some platforms deduct a service fee or equipment rental from your earnings. Where this is charged separately, it is an allowable expense. |
| Accountancy and software | Bookkeeping tools, your TapTax subscription, or an accountant's fee. |
For most delivery drivers, the approved mileage rate wins. Here is why: the 45p rate is designed to cover fuel, oil, tyres, servicing, MOT, insurance, and vehicle depreciation in a single figure. Keeping receipts for all of those and working out the business proportion is far more work, and the mileage rate often produces a larger deduction anyway, particularly for older, less fuel-efficient vehicles.
The catch is consistency. Choose mileage for a vehicle from day one and stick with it for the life of that vehicle. You cannot switch to actual costs mid-vehicle because, say, you had an expensive service year. Use the mileage tax calculator to see exactly what your annual driving is worth in tax relief before you decide.
Standard comprehensive car insurance almost never covers you for hire-and-reward work. Driving for Deliveroo, Just Eat or Amazon Flex on a personal policy leaves you both uninsured and potentially liable for claims. The additional premium you pay for hire-and-reward cover is not optional; it is a genuine cost of being a delivery driver, and HMRC treats it as a fully allowable business expense. Drivers who forget this either claim nothing at all, or claim only their standard premium and miss the additional cost.
Take a driver who works across three platforms: Amazon Flex, Evri and Just Eat. Over the 2025/26 tax year they earn a combined GBP 21,000 and cover 22,000 miles.
Mileage claim:
Other allowable expenses:
Taxable profit: GBP 21,000 minus GBP 7,500 minus GBP 1,720 = GBP 11,780
Because GBP 11,780 is below the GBP 12,570 personal allowance, this driver pays no income tax and no Class 4 NIC on their delivery income. Had they claimed no expenses and paid tax on the full GBP 21,000, their bill would have been roughly GBP 1,686 in income tax plus GBP 507 in Class 4 NIC. Correct mileage logging alone saved this driver over GBP 2,000.
Use the sole trader tax calculator to run your own numbers with your actual mileage and expense figures.
You only need to register for VAT if your taxable turnover exceeds GBP 90,000 in any rolling 12-month period. The vast majority of self-employed delivery drivers earn well below this threshold; even a full-time multi-platform driver would need to be pulling in GBP 7,500 a month in gross earnings before VAT becomes relevant. You do not need to do anything unless you cross that line.
Making Tax Digital for Income Tax (MTD for ITSA) is HMRC's shift from annual paper or online tax returns to quarterly digital submissions. For delivery drivers, the timeline is:
Practically, this means keeping digital records of every income payment and every expense throughout the year and submitting a summary to HMRC every quarter, with a final declaration each year. The annual tax bill does not change; it is the reporting method that becomes more frequent.
For delivery drivers, the good news is that your income is already largely digital. Platform dashboards record every payment; bank statements capture your fuel top-ups and parking. The main task is making sure your mileage log is kept contemporaneously, not reconstructed at year end. Read more about what the shift means practically in our MTD for sole traders guide.
1. Using personal car insurance for delivery work. As covered above, this is both a legal risk and a tax mistake. The hire-and-reward premium you should be paying is allowable; not paying it means you are uninsured, and claiming only the personal policy means you are under-claiming.
2. Not logging mileage as they go. Reconstructing 22,000 miles from memory in January is nearly impossible and HMRC can challenge undocumented mileage claims. A simple app or even a notebook in the vehicle, recording start and end points for each shift, is all you need.
3. Claiming the trading allowance instead of actual expenses. The GBP 1,000 trading allowance lets low-turnover self-employed people deduct GBP 1,000 with no record-keeping. For a delivery driver, this is almost always worse than claiming actual mileage and expenses. GBP 1,000 versus GBP 7,500 in mileage alone is a straightforward comparison.
4. Forgetting income from every platform. HMRC receives data from gig platforms. If you work three apps and only report one, expect a letter. Report all income; use the multiple income calculator if you want to see your combined position.
5. Missing the 31 January filing deadline. The GBP 100 automatic penalty applies even if you owe no tax. File on time, every time.
A delivery driver who logs every mile and claims their hire-and-reward premium correctly can often reduce their taxable profit to near zero on a modest income.
UK Airbnb tax guide: the GBP 7,500 Rent a Room scheme, the GBP 1,000 property allowance, the abolition of furnished holiday lettings, allowable expenses, VAT and MTD for landlords.
The complete UK tax guide for Uber drivers: gross fares, mileage claims, Uber service fees, VAT, and what MTD for Income Tax means for you.
UK eBay seller tax guide: selling personal items vs trading, the GBP 1,000 trading allowance, eBay fees, the platform reporting rules, VAT and MTD.
Tax guide for self-employed hairdressers: chair rent, allowable expenses, mileage, VAT and MTD for Income Tax explained in plain English.
Everything self-employed taxi and private-hire drivers need to know about tax, mileage vs actual costs, VAT, and Making Tax Digital in 2025/26.
Tax guide for self-employed cleaners in the UK. Learn what income to declare, which cleaning expenses to claim, and how MTD affects you from 2026.
TapTax connects to your bank, categorises expenses automatically, and submits quarterly updates to HMRC. Free plan, no card required.
