Uber drivers are self-employed, so you pay Income Tax and Class 4 National Insurance on your profit — your fares after Uber's service fee, business mileage and the other running costs of a licensed private-hire car. You are not taxed on the headline fare. For 2026/27 the first £12,570 of profit is tax-free, then Income Tax is 20% to £50,270, 40% above, then 45% over £125,140, with Class 4 NI adding 6% then 2%. Enter your figures above to see the bill with every step shown.
- You're taxed on profit, not fares — deduct the Uber fee, mileage and PHV costs first.
- Vehicle costs: claim 55p/25p simplified mileage or actual running costs — never both on the same car.
- Uber's service fee (around 25% of each fare) is a fully allowable expense.
- Class 4 NI: 6% on profit £12,570–£50,270, then 2% above; Class 2 is £0 but still earns State Pension credit over £7,105 profit.
- File and pay your 2026/27 Self Assessment by 31 January 2028.
How Uber private-hire driver tax is calculated
However your worker-status rights play out, for tax HMRC treats an Uber driver as a self-employed sole trader running a private-hire business. There's no PAYE and no employer doing the sums — you report your own figures through Self Assessment. The calculation has three stages:
- Work out profit. Start from your fares (your share before expenses), then take off allowable costs: Uber's service fee, your vehicle costs, hire-and-reward insurance, PHV licensing, phone and cleaning. What's left is your profit.
- Income Tax. Your profit (stacked on top of any wage or pension) is taxed at 20%, then 40% above £50,270, then 45% above £125,140 — after the £12,570 Personal Allowance.
- National Insurance. Class 4 NI runs at 6% on profit between £12,570 and £50,270, then 2% above. Class 2 is £0 but profit over £7,105 is "treated as paid" so you keep your State Pension qualifying year.
Allowable expenses for an Uber driver — and the mileage choice
The single biggest decision is how you claim for the car. HMRC lets you pick one of two methods per vehicle, and you can't switch mid-life of that car:
- Simplified mileage (Approved Mileage Allowance): a flat 55p per business mile for the first 10,000 miles, then 25p. This single rate is meant to cover fuel, servicing, MOT, repairs, insurance and depreciation, so you cannot also claim those separately. Most drivers keep a mileage log and use this — it's simpler and often larger than the running costs of an economical car.
- Actual running costs: add up real fuel, servicing, MOT, repairs, road tax, insurance and capital allowances for the car, then claim the business proportion (private-hire vs personal miles). This can win if you run a thirsty or expensive vehicle, but it needs every receipt.
Beyond the car, the costs that are specific to running an Uber private-hire operation include:
- Uber's service fee — the cut Uber takes from each fare (commonly around 25%). It's deducted on your Uber statement, but you still claim it as an expense against the gross fare.
- Hire-and-reward / private-hire insurance — the specialist cover you legally need to carry paying passengers (ordinary social-domestic-pleasure cover won't do).
- PHV licensing and vehicle fees — your private-hire driver licence, vehicle licence/plate, and the medical and DBS checks your council requires.
- Phone and mobile data — the business share of the phone you run the Uber app on.
- Car cleaning and passenger bits — valeting, and small extras like water or screen wash used for the job.
Worth knowing: since 2022 Uber accounts for VAT on the fare itself, but that's Uber's VAT position — it doesn't change the fact that you are taxed on your self-employed profit. You don't add VAT to your tax bill here.
The £1,000 trading allowance
If your total self-employed income for the year is £1,000 or less — say you only did a handful of weekend trips — it's usually tax-free and you needn't tell HMRC. Above £1,000 you must register for Self Assessment, but you can still deduct the flat £1,000 trading allowance instead of itemising. For a full-time Uber driver the real expenses (fee + mileage alone) dwarf £1,000, so actual expenses almost always win — switch the "deduct for expenses" option above to compare.
When do I pay?
Self Assessment runs on the tax year (6 April 2026 to 5 April 2027 is "2026/27"). The return and any tax are due by 31 January 2028. If your bill tops £1,000 you'll usually also make payments on account — two advance instalments towards next year, due 31 January and 31 July. A common habit is to move roughly 20–25% of each week's fares into a separate pot so January doesn't bite.
Making Tax Digital from April 2026
From 6 April 2026, drivers whose gross self-employed and property income is over £50,000 must keep digital records and send HMRC quarterly updates under Making Tax Digital for Income Tax. The trap for Uber drivers: the test is on gross fares, not profit — so a driver billing well over £50,000 in fares can be caught even though their profit after the Uber fee and mileage is far lower. Check where you stand with the qualifying-income checker.
Worked example
Priya drives full-time for Uber in a licensed private-hire car and uses the simplified mileage method. In 2026/27 her fares (her share, before expenses) come to £38,000. She drives 22,000 business miles, Uber's service fee is about 25% of fares, and she has £1,000 of other costs (hire-and-reward insurance, PHV licence, phone and cleaning).
| Step | Calculation | Amount |
|---|---|---|
| Fares (your share) | — | £38,000 |
| Uber service fee (~25%) | £38,000 × 25% | −£9,500 |
| Mileage allowance | (10,000 × 55p) + (12,000 × 25p) = £5,500 + £3,000 | −£8,500 |
| Insurance, PHV licence, phone, cleaning | — | −£1,000 |
| Profit | £38,000 − £9,500 − £8,500 − £1,000 | £19,000 |
| Income Tax | (£19,000 − £12,570) × 20% | £1,286.00 |
| Class 4 NI | (£19,000 − £12,570) × 6% | £385.80 |
| Class 2 NI | profit above £7,105 → treated as paid | £0 |
| Total to set aside | Income Tax + NI | £1,671.80 |
Note how the £8,500 mileage claim alone outstrips the £1,000 trading allowance many times over — which is why a working driver itemises rather than taking the flat allowance.
Frequently asked questions
Are Uber drivers self-employed for tax?
Yes. Whatever the position on employment rights, HMRC taxes Uber private-hire drivers as self-employed sole traders. You register for Self Assessment, report your own profit, and pay Income Tax and Class 4 NI directly — there's no PAYE.
Can I claim both 55p mileage and my actual fuel and car costs?
No. You pick one method per vehicle. The 55p/25p Approved Mileage Allowance already covers fuel, servicing, MOT, repairs, insurance and depreciation, so if you use it you can't also claim those actual costs. Use the calculator to add up your mileage figure and compare it against your real running costs before deciding.
Is the Uber service fee an allowable expense?
Yes. The roughly 25% Uber takes from your fares is a legitimate business cost. Enter your fares as the income, then include the fee within your expenses — exactly as the worked example does.
Does Uber accounting for VAT change my tax bill?
No. Since 2022 Uber handles VAT on the fare, but that's Uber's VAT obligation. You are still taxed on your own self-employed profit — fares minus allowable expenses. This calculator works out that profit and the Income Tax and NI on it; it doesn't add VAT.
What National Insurance does an Uber driver pay in 2026/27?
Class 4 NI at 6% on profit between £12,570 and £50,270, then 2% above. Class 2 is no longer a separate charge — profit above the £7,105 Small Profits Threshold is treated as paid and still counts towards your State Pension.
Sources: Income Tax rates and Personal Allowances, Self-employed National Insurance rates and simplified expenses for the self-employed (gov.uk), verified 11 June 2026. Estimates for information only — not regulated tax advice.