Tax Guide for UK Delivery Drivers: Advice for Uber Eats, Deliveroo, and Amazon Workers

As a delivery driver for platforms like Uber Eats, Deliveroo, or Amazon, understanding your tax obligations is crucial to ensure you comply with HMRC and avoid penalties. Whether you're delivering food or packages, you are considered self-employed, which comes with its own set of responsibilities regarding tax returns, VAT, and expenses.

Your Tax Responsibilities as a Self-Employed Driver

As a self-employed delivery driver, you must submit a self-assessment tax return to HMRC each year. This includes declaring all your earnings from Uber Eats, Deliveroo, Amazon, or any other delivery service. You can access the HMRC Self-Assessment page to learn more.

Tax returns include not only your income but also any deductible expenses you may have incurred during your work. It's vital to maintain accurate records to avoid missing out on any allowable deductions.

What Expenses Can You Claim?

Being self-employed means you can claim various expenses to reduce your taxable income. Here are some common examples for delivery drivers:

• Vehicle Costs: Whether you're using your car, van, or bike for deliveries, you can claim expenses like fuel, maintenance, insurance, and repairs. HMRC allows you to use the official mileage rate to calculate vehicle-related expenses.
• Phone and Data: A mobile phone is essential for communication with customers and navigation. You can claim a portion of your phone bill and data costs if they are used for business purposes.
• Clothing and Equipment: If you need to buy special clothing or carry thermal bags for deliveries, these costs may also be deductible.

For a full list of allowable expenses, visit HMRC's guide on expenses.

How to Use the Trading Allowance

The trading allowance is a tax exemption that allows self-employed individuals to earn up to £1,000 per year without needing to pay tax. If your income from delivery work is below this threshold, you don’t need to file a tax return for that income.

However, if your total income exceeds £1,000, you must report it to HMRC, and you can no longer use the trading allowance. You can decide whether to deduct your expenses or use the £1,000 allowance, whichever is more beneficial to your situation.

For more on the trading allowance, check out the HMRC guidance on allowances.

Registering for VAT

If your total income exceeds the VAT registration threshold (£90,000), you must register for VAT with HMRC. After registering, you’ll need to charge VAT on your deliveries and submit regular VAT returns.

For drivers earning above this threshold, registering for VAT can be beneficial, especially if you incur significant business expenses that include VAT.

To learn more about VAT registration, visit HMRC’s VAT registration page.

Maximising Tax Efficiency with Software

To help streamline your tax filings, you can use accounting software such as Xero, QuickBooks, or FreeAgent. These platforms can help you keep track of your expenses, calculate VAT, and automatically submit your tax returns online in compliance with Making Tax Digital.

For more on online accounting, visit our Xero services or QuickBooks solutions.

Avoiding Penalties and Fines

Failure to submit your tax return or VAT return on time can result in hefty fines and interest charges. HMRC penalties can escalate quickly, so it’s essential to stay on top of deadlines. For help with your tax returns or managing your finances, an accountant can guide you through the process to ensure compliance and avoid costly mistakes.

At Virtue Accountants, we specialise in helping delivery drivers and small businesses with their tax filings. If you need assistance, feel free to contact us.

Conclusion

Being a delivery driver for platforms like Uber Eats, Deliveroo, or Amazon means you must stay on top of your tax responsibilities. From claiming expenses to understanding the trading allowance, following the right processes can save you money and ensure compliance. At Virtue Accountants, we offer expert advice and can help with everything from VAT returns to self-assessment. Contact us today for a consultation!

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