Complete List of Taxi Driver Expenses You Can Claim
By Sardar Muhammad, AAT • • 8 min read
💰 Why Expenses Matter
Every pound you claim as an allowable expense reduces your taxable profit. Less taxable profit = less tax to pay. Many taxi drivers miss thousands of pounds in legitimate expense claims each year. Use this checklist to make sure you're claiming everything you're entitled to.
Two Methods: Actual Costs vs Simplified Expenses
Before we list expenses, you need to understand your options:
Option 1: Actual Costs
Claim the actual business proportion of all vehicle expenses:
- Keep all receipts and invoices
- Calculate business vs personal use percentage
- Best for high-mileage drivers with expensive running costs
Option 2: Simplified Mileage Rate
Use HMRC's flat rate per business mile:
- Cars: 45p per mile (first 10,000), 25p thereafter
- Motorcycles: 24p per mile
- Simpler record-keeping – just track mileage
- Cannot claim separate fuel, insurance, repairs etc.
My recommendation: For full-time taxi drivers doing 30,000+ miles per year, actual costs usually work out better. I can calculate both methods for you.
🚗 Vehicle Running Costs
Only claim these if using the actual costs method
| Expense | Notes |
|---|---|
| Fuel (petrol/diesel) | Business proportion only |
| Electric vehicle charging | Home and public charging |
| Vehicle insurance | Must cover hire & reward |
| Road tax (VED) | Full amount if 100% business use |
| MOT test | Annual test fee |
| Servicing | Regular maintenance |
| Repairs | Mechanical repairs |
| Tyres | Replacement and repair |
| Breakdown cover | AA, RAC, Green Flag etc. |
| Car wash / valeting | Keeping vehicle clean |
| Parking (while working) | Not personal parking |
| Congestion charges | If driving in charge zones |
| Toll charges | Business journeys only |
📋 Licensing & Regulatory
| Expense | Notes |
|---|---|
| Private hire/taxi badge | Glasgow City Council licence |
| Vehicle licence (plate) | Annual renewal |
| DBS check (disclosure) | Criminal record check |
| Medical examination | Required for licensing |
| Knowledge test fees | Initial or renewal tests |
| Topographical test | If required by council |
📱 Technology & Equipment
| Expense | Notes |
|---|---|
| Mobile phone | Business proportion |
| Phone contract/data | Essential for apps |
| Phone mount | Dashboard holder |
| Phone charger (car) | 12V or USB charger |
| Sat nav subscription | TomTom, Google Maps etc. |
| Dashcam | For safety/insurance |
| Card payment terminal | iZettle, SumUp etc. |
| Transaction fees | Card payment processing |
🎽 Clothing & Passenger Comfort
| Expense | Notes |
|---|---|
| Uniform/branded clothing | If required by operator |
| Bottled water for passengers | Hospitality items |
| Mints/sweets | For passengers |
| Air fresheners | Vehicle presentation |
| Phone chargers (passengers) | Customer service |
| Seat covers | Protecting vehicle |
🏢 Business & Administrative
| Expense | Notes |
|---|---|
| Uber/Bolt service fees | Commission deducted from fares |
| Taxi operator radio rent | If using dispatch system |
| Public liability insurance | Additional coverage |
| Accountancy fees | Tax return preparation |
| Use of home office | £6/week or proportion of bills |
| Business bank charges | If applicable |
| Stationery | Receipt books, pens |
❌ What You Cannot Claim
- Everyday clothing – normal clothes you could wear outside work
- Food and drink for yourself – unless overnight stays away from home
- Fines and penalties – parking tickets, speeding fines
- Personal portion of expenses – private mileage, personal calls
- Initial driving lessons – but advanced training may qualify
Record Keeping Tips
- Keep all receipts – photograph them or use an app
- Track mileage – use an app or logbook
- Separate business banking – makes tracking easier
- Download Uber/Bolt statements – keep annual summaries
- Keep records for 6 years – HMRC can check back this far
Need Help Claiming Expenses?
I'll make sure you claim everything you're entitled to.
Sardar Muhammad, AAT Certified
Sardar is an AAT certified accountant and founder of LimeTree Accounting Solutions in Glasgow. He specialises in helping taxi drivers, delivery drivers, and self-employed professionals with their tax returns.