Whether you're delivering for Amazon Flex, Uber Eats, Deliveroo, Just Eat, DPD, or Hermes — if you're classified as self-employed, you need to understand your tax obligations. The good news? Your vehicle costs can save you thousands. This guide explains everything.
Contents
Are You Really Self-Employed?
This is a hot topic. Several court cases have challenged the self-employed status of gig economy workers. As of 2025/26:
- Uber drivers: Supreme Court ruled they're "workers" (not self-employed, not employees) — entitled to minimum wage and holiday pay, but still file self-assessment
- Deliveroo riders: Generally treated as self-employed
- Amazon Flex: Self-employed
- Courier companies (DPD, Hermes, etc.): Varies — check your specific contract
Even if you're a "worker" for employment rights purposes, you may still need to file a Self Assessment and pay your own tax. Check your payslips — if tax isn't being deducted at source, you're responsible for it.
Registering with HMRC
If you earn more than £1,000 from delivery work in a tax year, you must:
- Register as self-employed at gov.uk
- File a Self Assessment tax return each year
- Pay any tax owed by 31 January
Under the £1,000 trading allowance, your first £1,000 of self-employed income is tax-free. But if you earn more than £1,000, you must register.
Working Multiple Platforms
Many delivery drivers work across 2-3 platforms — Deliveroo for lunch, Uber Eats for dinner, Amazon Flex on weekends. For tax purposes:
- All platform income is combined as one self-employment
- You file one Self Assessment, not multiple
- Download your annual earnings statement from each platform (usually available in January)
- Add them all together for your total income
Example — Multi-platform driver:
- Uber Eats: £12,000
- Deliveroo: £8,000
- Amazon Flex: £5,000
- Total self-employed income: £25,000
Minus expenses (see below), this gives your taxable profit.
Vehicle Expenses
Your vehicle is your biggest business tool — and your biggest tax deduction. You have two options (you must pick one and stick with it for that vehicle):
Option 1: Actual costs
Track every vehicle cost and claim the business proportion:
- Fuel (petrol, diesel, or electricity)
- Insurance (business use must be included)
- Repairs and servicing
- MOT
- Road tax
- Tyres
- Breakdown cover
- Car wash (if needed for work)
- Parking charges (while working)
- Finance interest (not capital repayment)
You then calculate business percentage. If you drive 20,000 miles per year and 15,000 are for deliveries, you claim 75% of all costs.
Option 2: Mileage allowance
- First 10,000 business miles: 45p per mile
- Over 10,000 miles: 25p per mile
At 15,000 business miles: (10,000 × 45p) + (5,000 × 25p) = £4,500 + £1,250 = £5,750 deduction
Which should you choose?
For most delivery drivers doing high mileage in an older car, actual costs usually win. But mileage is simpler and doesn't require keeping every receipt. Use our mileage tax calculator to compare.
Important: Once you choose mileage for a vehicle, you can never switch to actual costs for that same vehicle. If you buy a new vehicle, you can choose again.
Tracking Your Mileage
Whether you use actual costs or mileage allowance, you need to track your business miles. HMRC can ask for proof at any time.
What counts as business mileage:
- Driving to pick up deliveries ✅
- Driving between deliveries ✅
- Driving home after your last delivery ✅ (if you started from a pickup point)
- Driving from home to your first pickup ❌ (this is commuting if you always start from the same zone)
How to track: Use a mileage tracking app (Stride, MileIQ, or even a simple spreadsheet). Record the date, start/end points, and miles for each delivery session. Don't try to reconstruct this at year-end — do it daily or weekly.
Other Deductible Expenses
| Expense | Notes |
|---|---|
| Phone bill | Business proportion — you need your phone for the app |
| Phone mount/holder | 100% business |
| Thermal delivery bag | 100% business (if you bought your own) |
| Waterproof clothing | If distinctly for work (branded delivery jacket, etc.) |
| Bike maintenance | If using a bicycle — tyres, brake pads, chain, service |
| Phone data plan upgrade | Extra data needed for delivery apps |
| Power bank/charger | To keep phone charged during shifts |
| Dash cam | Business asset, fully deductible |
| Accounting software | Or our Tax Tracker (£9) |
E-Bikes and Electric Vehicles
Using an electric vehicle for deliveries has tax advantages:
Electric cars and vans
- 100% first-year allowance: Deduct the full purchase cost in year one
- Zero road tax
- Lower fuel costs: Electricity is cheaper per mile than petrol/diesel
- HMRC advisory rate: 7p per mile for electric cars (if employer-owned — for self-employed, use actual costs or 45p mileage)
E-bikes
- Purchase cost is a capital expense — claim through AIA
- No road tax, no insurance requirement (for pedal-assist up to 15.5mph)
- Charging costs are deductible
- Maintenance is deductible
If you cycle for Deliveroo or Uber Eats, you can claim 20p per mile for bicycle mileage. On an e-bike doing 30 miles per shift, 5 days a week, that's roughly £1,500 per year in mileage deductions.
How Your Tax Is Calculated
Example — Full-time delivery driver:
- Total platform earnings: £25,000
- Minus vehicle costs (mileage): -£5,750
- Minus phone: -£300
- Minus equipment: -£200
- Taxable profit: £18,750
Tax calculation:
- Personal allowance: £12,570 (tax-free)
- Taxable at 20%: £6,180 × 20% = £1,236
- Class 2 NI: £3.45/week × 52 = £179
- Class 4 NI: (£18,750 - £12,570) × 6% = £371
- Total tax + NI: £1,786
Without claiming expenses, tax would be £2,886. That's £1,100 saved just from mileage and a few small claims.
Tax-Saving Strategies
1. Track every mile
This is the single biggest thing you can do. A driver doing 15,000 business miles saves £5,750 in deductions using mileage allowance. At 20% tax, that's £1,150 less tax.
2. Use the trading allowance wisely
If you earn under £1,000, you don't need to register or file. If you earn slightly over £1,000, you can use the £1,000 trading allowance instead of claiming actual expenses — whichever gives a bigger deduction.
3. Set aside tax monthly
Put 20-25% of every payment into a separate tax savings account. Don't spend it. When January comes, you'll have the money ready. Read our guide to paying yourself as a sole trader.
4. Pension contributions
Reduce your taxable profit and save for retirement. Even £50/month into a SIPP gets tax relief. See our self-employed pension guide.
5. File early
You can file from 6 April for the previous tax year. Filing early means you know exactly what you owe (no surprises in January) and can spread payments if needed.
Common Mistakes to Avoid
- Not registering at all — HMRC gets data from platforms. They know you earned. Register voluntarily or face penalties.
- Claiming personal mileage as business — Your regular commute to a fixed starting point isn't business mileage.
- Forgetting about tips — Cash tips are taxable income. Report them.
- Mixing personal and business money — Use a separate bank account. Read our bank account guide.
- Not keeping records — HMRC can investigate up to 6 years back. Keep receipts and mileage logs.
Track Your Delivery Earnings & Tax
Our Freelancer Tax Tracker has categories for vehicle costs, mileage tracking, and multi-platform income. See your tax bill update in real time as you log earnings and expenses.
Get the Tax Tracker — £9