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When you’re a Deliveroo rider, you may not think about paying tax on what you earn. But when you earn over a certain amount, it’s your responsibility to let HMRC know that you have untaxed income.
It can seem pretty complicated at first, but never fear, TaxScouts is here to break it all down step-by-step and to help you avoid getting stung by penalties. There are a lot of things that people don’t know about when it comes to taxes.
Here are our top seven tips that we think all Deliveroo riders should know about before taking on your taxes.
So, what even is your employment status? It’s determined by more than just whether or not you have a job. You can be:
If you do not have a full-time job and either get all of your income from Deliveroo or your income is made up of a selection of roles (e.g. courier driving, selling on Depop etc.), you’ll have to declare your income to HMRC and most likely do a tax return.
This may seem obvious but it’s super-important. Doing your taxes can get very complicated, especially if you’re doing it all in a mad rush at the end. A good way to stay organised is to keep an online record of your finances on a yearly spreadsheet. Split the sheet into monthly tabs and organise each tab into income and expenses.
That way, when it comes to giving the information to HMRC, you’ll be able to pull it quickly and without the big risk of having made a mistake.
True story. Similar to the spreadsheet tip, getting a business account is a good way to help you stay organised. It enables you to split your personal expenses from your business ones, so when it comes to you doing your tax return, you won’t be sifting through massive bank statements manually.
There are loads of options for business accounts nowadays, many of them free for basic services. Check out our partners at Monzo Business and Money Dashboard – and you can even get a discount on your tax return too!
Expenses are a point of much confusion for the self-employed workforce, no matter how long you’ve been part of it. So let’s start with the basics. How does it work? When you pay your tax bill, you’re allowed to deduct any business expenses from your overall earnings so that you’re only paying tax on your profits.
The general rule when it comes to your expenses is that whatever you deduct must be wholly, exclusively and necessarily for your business:
For example, you could expense petrol you used whilst driving to deliveries or bike repairs; you can’t expense the cost of the motorbike or bicycle.
Check out more details about expenses.
As we said before, the tax that you owe can vary depending on your employment status. Generally speaking, we all have to pay:
But when you’re both employed and self-employed, you can earn up to £1,000 of tax-free self-employed income via the Trading Allowance.
Just to be complicated, the tax year doesn’t run from January to December like our calendar year. It goes from April to April instead. This means that if you do owe tax on your Deliveroo income, you’ll work it out based on what you earned between 6th April and 5th April every year.
You then pay what you owe by the following January.
You have to let HMRC know that you’re earning untaxed income. To do this, you do what’s known as a Self Assessment by 5th October.