If you’re a PCO driver, taxi driver or private hire driver in London, you know how fast fuel, car hire and road tax eat into your earnings. When Self-Assessment comes around, one question matters:
Which of these costs can you claim as business expenses to reduce your tax bill?
In the UK, you can usually claim a wide range of PCO driver expenses as long as they are “wholly and exclusively” for your work. That includes many vehicle costs, PCO licensing fees, insurance, cleaning, phone and platform charges.
This article focuses on self‑employed drivers – especially anyone driving for Uber or similar apps, who want clear guidance on uber driver tax deductions UK.
Disclaimer: This blog contains general information, not personal tax advice.
Quick Answer: Common Expenses You Can Usually Claim
Most self‑employed PCO drivers can claim the following types of business expenses on their Self-Assessment tax return:
- Business mileage or fuel
- PCO/private hire insurance
- Car hire, lease or finance interest on your work vehicle
- Servicing, MOT, repairs, tyres and breakdown cover
- Road tax and required inspections
- PCO licensing costs, medicals, topographical tests and DBS checks
- Parking, tolls, Congestion Charge and ULEZ while working
- Cleaning and valeting to keep the car passenger‑ready
- A fair share of your phone bill and data for work apps
- Platform commissions and service fees (Uber, Bolt, etc.)
- Accountancy, bookkeeping and tax software
- A reasonable share of home‑office costs if you run admin from home
You must only claim the business part of any mixed‑use cost, such as a car or phone you also use personally.
Mileage, Fuel and Simplified Expenses
For many private hire drivers, the biggest question is how to handle vehicle costs. HMRC offers two main options:
- Simplified expenses using mileage
- Claiming actual costs
Option 1: Simplified mileage method
With the simplified method, you claim a flat rate for each business mile you drive instead of listing every cost.
For the 2026/27 tax year, the approved HMRC mileage rates for cars and vans are:
- 45p per mile for the first 10,000 business miles
- 25p per mile for business miles above 10,000
Source: Travel — mileage and fuel rates and allowances – GOV.UK
These rates are designed to cover running costs such as:
- Fuel or charging
- Maintenance and repairs
- Insurance and road tax
If you use this method, you don’t usually claim separate vehicle costs like fuel, servicing or insurance. You can still claim things like parking, tolls, Congestion Charge and ULEZ on top.
Option 2: Actual vehicle costs
Alternatively, you can claim a share of your real running costs, for example:
- Fuel or EV charging
- Insurance
- Servicing, MOT and repairs
- Road tax and breakdown cover
Source: Expenses if you’re self-employed: Car, van and travel expenses – GOV.UK
If you use your vehicle for both business and personal journeys, you must work out a sensible business‑use percentage and apply it consistently.
You typically stick with one method for each vehicle. If you drive high mileage or have expensive finance or hire costs, it can be worth asking an accountant which approach may give you better long‑term tax savings.
What Counts as Business Mileage?
Understanding business mileage is crucial for both mileage claims and actual cost claims.
Usually counts as business mileage:
- Driving to pick up and drop off passengers
- Travelling between different work areas or temporary workplaces
- Certain journeys from home if your home is genuinely your business base
Usually does not count:
- Normal commuting to a permanent workplace
- Personal trips, such as shopping or visiting friends
To support your claim, keep a simple mileage log with:
- Date of the journey
- Start and end points
- Purpose (business or personal)
- Miles driven
Good records help if HMRC ever asks about your income tax return.
Source: Claim tax relief for your job expenses: Vehicles you use for work – GOV.UK
PCO Licensing, Insurance and Compliance Costs
Being licensed is a core part of working as a PCO or Uber driver. Many of these costs are allowable as tax deductions because they enable you to work.
Examples include:
- PCO licence application and renewal fees
- Medicals required for licensing
- Topographical tests
- DBS/background checks
- Any local authority or TfL private hire fees
Your PCO insurance, not standard social‑only cover, is also a key business cost. If your policy covers both work and personal use, you should only claim the business share.
Other Business Expenses Many Drivers Miss
On‑the‑road costs
You can usually claim:
- Parking fees while working
- Road, bridge and tunnel tolls
- London Congestion Charge and ULEZ when driving for work, not on personal trips
You cannot claim fines or penalties, such as speeding or parking fines.
Cleaning and valeting
As a private hire driver, keeping the car clean is part of the job. Allowable costs usually include:
- Regular car washes
- Interior cleaning
- Professional valeting, especially after spills or late‑night incidents
Phone, apps and platforms
Most PCO drivers rely heavily on their phones. You can normally claim a reasonable business share of:
- Your mobile phone bill and data used for booking apps and navigation
- Commissions or service fees taken by Uber and other platforms
- Paid dispatch, navigation or fleet management apps
If you manage your records at home, you may also be able to claim a fair share of household costs or use HMRC’s simplified home‑working amounts, if the space is genuinely used for your business.
What You Can’t Claim (Or Should Be Careful With)
To keep your Self-Assessment clear and fair, it helps to know what usually isn’t allowable:
- Personal journeys and normal commuting
- Clearly private spending unrelated to your work
- Penalty charges and fines
- Everyday clothing that isn’t protective or specialist
- 100% of vehicle or phone costs if there is obvious personal use
Overstating your tax deduction might reduce your tax bill in the short term, but it increases the risk of HMRC questions later. It’s safer to claim realistic amounts you can explain and back up.
Source: Drivers and deterrents of inaccurate Self Assessment repayment claims – GOV.UK
Records to Keep for Your Self-Assessment Tax Return
Good records are essential if you want to claim PCO driver expenses with confidence. Aim to keep:
- A mileage log for business journeys
- Receipts and invoices for fuel, repairs, cleaning, parking, congestion charges and tolls
- PCO licensing and insurance documents
- Bank statements showing your business income and outgoings
- Notes showing how you worked out your business‑use percentages
Keeping on top of this during the tax year makes your Self-Assessment tax return much easier and helps you pay tax correctly and on time.
Claim Fairly, Stay Compliant
Being a self‑employed PCO or Uber driver means balancing long hours with tight margins. You can’t avoid tax, but you can:
- Claim legitimate PCO driver expenses
- Choose a sensible method for vehicle costs
- Keep clear records so your claims are easy to justify
If you’re unsure about anything, especially bigger points like simplified expenses vs actual costs, consider speaking to a UK accountant who understands private hire drivers. That way, you aim for sensible tax savings while staying on the right side of HMRC.
