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What can delivery drivers claim on tax?

We've updated this guide on 6th October 2021

So what exactly can delivery drivers claim on tax, and how do you do it?

Well, first things first, did you even know that if you’re a delivery driver and self-employed that you could claim back some tax from HMRC? The rule is that if you’re required to complete a Self Assessment tax return, you’re able to claim back some of the costs as expenses.

How will I know if I’m eligible?

Unsure if you’re eligible to claim back tax? Unless you’re in full-time employment, it’s likely that you are. This is because most delivery drivers are classified as self-employed in the eyes of HMRC. 

There’s a bit of a debate going on about whether drivers are self-employed, or an employee of a company making them entitled to workers’ rights. Regardless, it still helps for you to be informed about whether or not you need to do a tax return.

HMRC requires you to complete a Self Assessment tax return if you are:

  • A sole trader
  • A director of a limited company – or the director and the only employee of a limited company
  • Receiving income that is not taxed at source (which just means taxed direct from your salary)

What can delivery drivers claim on tax returns?

The general rule surrounding claims is that any expenses that you have incurred which are ‘wholly and exclusively’ for your work are tax deductible. This includes:

  • Fuel costs
  • The cost of repairs, servicing and running of your vehicle
  • The costs of your annual road tax and your MOT test
  • The cost of cleaning your own vehicle
  • Interest on any bank or personal loans taken out to purchase your vehicle
  • Your license and any other registration fees
  • Car insurance
  • Breakdown recovery membership fees
  • Phone usage for business use
  • Parking & toll charges

It’s important that you keep receipts of all your expenses so you can include them in your tax return. Otherwise, HMRC won’t have any record to go on! Also, be aware that if you use the same vehicle for your own personal use then you’ll need to factor this in when any expenses are claimed.

What about fuel costs?

You can claim back tax on any fuel cost you have incurred whilst driving your own vehicle for work. How much you can claim depends on how much you travel during your delivery hours.

You do this through a mileage allowance, which calculates your vehicle expenses using a flat rate for mileage instead of the actual costs of running your vehicle. With this you can claim 45p per mile for the first 10,000 and 25p thereafter. 

Can I claim back on the cost of my new car or van?

Yes! You can also claim back the cost of your delivery vehicle through Capital Allowances. These can vary anywhere between 18% to 100% depending on the type of your vehicle. 

How can I claim back my expenses?

To claim back your expenses, you must register for Self Assessment with HMRC before the deadline. You have until the 5th October in any given year to do this. 

When it comes to declaring your expenses, you simply fill in the relevant section on your Self Assessment tax return form. If you need assistance with this, you can hire an account to help you or use an online service (like TaxScouts!).

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