Uber vs Local Taxi Office: What Changes for Your Tax?

Are Uber and Local Taxi Office Drivers Self-Employed?

Most Uber, Bolt, FREENOW, private hire and local taxi-office drivers are self-employed sole traders. This normally means you're responsible for registering for Self Assessment when required, keeping records of all business income and expenses, completing one Self Assessment tax return each year, paying Income Tax and National Insurance on your business profit, and following VAT rules if your business is VAT registered or required to register. See our UK taxi driver tax guide for the full picture of how this works.

You may work through several platforms and a local taxi office at the same time. You do not submit a separate tax return for every platform or operator — instead, you include the income and expenses from your whole taxi-driving business in one return. For example, if you drive for Uber during the day, work Bolt at weekends and take local office jobs in the evenings, all three income streams should be included in your business records.

Uber vs Taxi Office: The Main Tax Difference

The biggest difference is usually the paper trail.

Whichever way you get work, HMRC expects your tax return to reflect accurate income and allowable expenses.

What Income Must an Uber Driver Declare?

Uber and other app-based drivers should keep records of all business income, including passenger fares, surge or dynamic-pricing income, tips, airport fees shown in statements, booking-related income, incentive payments, referral bonuses, promotions, cancellation payments where applicable, and any other app-based earnings. See our Uber driver expenses guide for what you can deduct against this income.

Uber provides drivers with an Annual Tax Summary showing gross earnings and potential business-related expenses, plus trip and payout information through the driver account.

Should App-Based Drivers Declare Gross Fares or Net Payouts?

Don't rely only on the money that reaches your bank account. The bank payment may be lower because Uber or another platform has deducted its service fee, commission, adjustments or other charges. In many cases, platform statements show:

Gross fares earned

less platform commission or service fee

less adjustments or charges

equals amount paid to the driver

Your income and expense records must match the contractual arrangement and the information on your platform statements. A common bookkeeping approach is to record the fare income and then record qualifying platform commission as a separate expense. For example:

Example	Amount
Passenger fares	£1,000
Uber service fee / commission	£250
Amount paid into your bank	£750

If the £1,000 is your gross business income under the platform arrangement, you'd record taxi income of £1,000 and a platform commission expense of £250, giving a net amount of £750 before your other costs. The commission is not "free money" or ignored income — it's a cost of obtaining bookings, similar to a local taxi office's radio rent or commission. Always use the exact figures from your Uber, Bolt or other platform statements rather than estimating based only on your bank deposits.

Platform Reporting to HMRC: Why Your Records Matter

Since 1 January 2024, UK digital platforms that allow sellers to provide services may need to collect information about sellers and report income details to HMRC — the first reports were due in January 2025. HMRC says a digital platform may report details of income earned on the platform, and it must provide the seller with a copy of the information it reports.

This doesn't mean every amount reported automatically equals your final taxable profit — you can still deduct legitimate business expenses, such as platform commissions, fuel or charging costs, taxi insurance, repairs and servicing, private hire licence fees, vehicle cleaning, phone and data use, accounting fees, and business-use parking and tolls. It does mean drivers should make sure their tax records can be reconciled to their Uber, Bolt or other platform statements.

What Income Must a Local Taxi-Office Driver Declare?

A local taxi office may send you jobs through a radio system, phone, app or dispatcher. Depending on your arrangement, you may receive cash fares paid directly by passengers, card fares settled through the office, account-job payments, school-run or council-contract income, corporate-booking income, airport-transfer income, driver tips, and payments after the office deducts commission or weekly fees. You must declare the income you earn from taxi work, even when passengers pay in cash — cash fares are taxable business income just like card or app payments.

A local office may provide weekly settlement statements. Keep these carefully because they may show total jobs or fare value, card income received by the office, cash jobs, office commission, radio rent, booking charges, account payments, amount transferred or paid to you, and adjustments and refunds. If your office doesn't provide complete statements, keep your own daily fare record.

How to Record Cash Taxi Fares Correctly

Cash fares can be difficult to reconstruct months later. Create a simple daily record with the date, cash fares received, card fares, account jobs, tips, booking fees or commission paid, parking and toll costs, fuel or charging costs, and mileage if relevant. A simple note on your phone, spreadsheet or bookkeeping app is far better than trying to estimate your cash income in January.

Date	Cash fares	Card/app fares	Tips	Office/platform fees	Business costs
12 August 2026	£180	£95	£12	£25	£46 fuel
13 August 2026	£145	£130	£8	£30	£12 parking
14 August 2026	£210	£80	£15	£20	£35 charging

At the end of each week, compare your own record with bank payments, card-terminal reports, app statements and local-office settlements.

Are Taxi Office Fees and Uber Commission Tax Deductible?

Booking-related fees are usually a genuine business cost if they're incurred wholly and exclusively for your taxi or private hire work. Potentially allowable examples include Uber service fees, Bolt or FREENOW commission, local taxi-office commission, radio rent, circuit or base fees, booking-system subscriptions, card-payment processing fees, dispatch-app charges, driver app subscriptions, and accountancy and bookkeeping fees.

Retain statements and invoices that show the fees deducted — don't claim an estimated commission figure if the actual statement is available. Remember: a tax deduction reduces your taxable profit; it does not mean HMRC pays the full cost back to you. For the full list of claimable costs, see Allowable Expenses for Taxi and Private Hire Drivers in the UK.

Tips, Bonuses and Promotions

Taxi-driver income is not limited to the fare itself. Cash tips, in-app tips and card tips are normally business income and should be recorded — keep a simple weekly figure for cash tips if passengers don't provide receipts. Platform incentives, trip bonuses, referral rewards and promotions can be taxable income too, and may appear in a separate section of your app statements.

A cancellation or no-show payment may form part of your business income — keep it in your income records and check how the platform or taxi office has shown it. If a fare was refunded to a passenger or adjusted by the operator, don't accidentally report the original amount twice; keep the original statement and the adjustment record.

Uber, Bolt and Local Office Expenses: What Changes?

Your core taxi costs are often the same regardless of where your jobs come from.

HMRC says self-employed people may claim qualifying vehicle costs such as fuel, insurance, repairs, servicing, parking, licence fees and breakdown cover. It does not allow claims for private travel, fines or ordinary commuting between home and work.

Mileage Versus Actual Costs

Whether you drive for Uber, Bolt or a local office, you may need to decide how to claim vehicle costs. You normally use one of these methods for an eligible vehicle:

Actual costs method

You total the real vehicle expenses, such as fuel, insurance, repairs, tyres, MOT, vehicle tax, cleaning and relevant finance costs. If you use the vehicle privately, you restrict the claim to the business proportion.

Simplified mileage method

You keep a mileage record and claim the applicable approved mileage rate for qualifying business miles. This method is simpler, but you cannot then claim the vehicle-running costs already covered by the mileage rate separately. For either method, keep enough records to show business use, especially if you use your taxi or private hire vehicle for family or private journeys too.

VAT: App Driving Versus Local Office Work

VAT depends on your taxable turnover and on the legal arrangement between the passenger, driver, platform and operator. For taxi and private hire businesses, the current VAT-registration threshold is £90,000 of taxable turnover — based on turnover, not profit. See our full VAT for taxi drivers guide for the detail.

For an app-based driver, it's particularly important not to assume that the bank payout alone is the relevant turnover figure — platform fees may have been deducted before payment, and the correct VAT position can depend on whether you, the platform or an operator is supplying the journey to the passenger. For a local taxi-office driver, the office may act as principal, agent or simply a booking provider — your contract, payment flow and customer terms matter. Speak to a VAT adviser before registering voluntarily or concluding that you're below the threshold, especially if you have a combination of app fares, office work, airport transfers, contract work and other self-employed income.

Making Tax Digital: Gross Income Matters

Making Tax Digital for Income Tax is being introduced in stages. From April 2026, self-employed people and landlords with qualifying income above £50,000 are in the first mandatory group, with the threshold scheduled to reduce in later years.

For app-based drivers, check your gross business income carefully — a driver receiving £45,000 in net app payouts may have a higher total before platform commission is deducted. Maintain digital records that clearly separate gross fares or taxi income, platform commission or office fees, tips and bonuses, business expenses, private-use adjustments, and mileage records if used. This will make quarterly updates and your final tax return much easier to prepare.

Simple Monthly Checklist

At the end of every month: download Uber, Bolt, FREENOW and other platform statements; save local taxi-office settlement statements; add up cash fares and cash tips from your daily record; record promotions, incentives and referral payments; categorise platform fees, office commission and radio rent; save receipts for fuel, repairs, insurance, cleaning and licensing; update your mileage log if you use mileage expenses; compare income records with your business bank account; set aside money towards Income Tax and National Insurance; and keep all records in one secure cloud folder or bookkeeping system. Doing this monthly can prevent a stressful and inaccurate tax return at the end of the year. Our Self Assessment checklist for taxi drivers covers the filing process itself.

Frequently Asked Questions