Whether you’re a taxi driver or a taxi fleet manager, it’s important to know what you can, and cannot, claim expenses for.
This post will provide an essential overview of allowable expenses for taxi drivers. If you have any more questions about your legal responsibilities as a taxi driver or taxi fleet manager, call our dedicated team on 0208 290 9099, or email CM@AnthonyJones.com.
What Expenses Can Taxi Drivers Claim on Taxes?
Here’s a list of allowable expenses for taxi drivers:
- Vehicle expenses – Including fuel costs, electric vehicle charging costs, maintenance and servicing costs, cleaning costs, and annual road tax and vehicle insurance costs.
- Administration expenses – Including office supplies, phone and internet bills, and tech such as laptops, tablets, smartphones, along with any associated subscriptions. You can also claim for any fees associated with a business bank account.
- Licence and registration – Taxi drivers can claim any licence and registration fees as expenses, including RAC or AA membership.
- Parking and tolls – You can also claim for any parking costs or tolls you incur while on the job.
- Third party services – For example, if you appoint an accountant to manage your finances, or a marketing assistant to manage your website or social media, their fees count as an allowable expense.
- Training fees – For instance, if you take an advance driving course, or a specialist training course for taxi drivers, you can claim any expenses on your tax return.
Capital Allowances for Taxi Drivers
In addition, taxi drivers may be eligible for tax relief in the form of capital allowances. For example, you may be able to deduct the cost of your vehicle from your taxable profits. The amount of relief you can receive depends on the vehicle you drive as part of your job. In most cases, it’s 18% per annum. But if you drive a black cab, you could be eligible for a 100% Annual Investment Allowance.
Check the HMRC site for more information about capital allowances for taxi drivers.
What Expenses Can Taxi Drivers Not Claim?
If you receive any fines for parking or other offences, you cannot claim these fines as a business expense. It is also illegal to claim personal expenses as business deductions. This means you cannot claim for any food or drink you purchase while on the job, nor for any clothing you buy to wear at work.
And speaking of personal expenses, if you ever drive your taxi for personal reasons outside of work, you will need to account for this in your tax return. For this, you’ll need to work out approximately how much you drive your taxi for personal use (say, 10% of the time), and deduct this from your vehicle-related expenses.
Additional Support For Taxi Drivers and Taxi Fleet Managers
At Anthony Jones, we offer specialist risk assessment and insurance services for taxi drivers and taxi fleet managers. Be sure to read our essential introduction to taxi fleet insurance!
If you have any more questions about your legal responsibilities as a taxi driver or taxi fleet manager, call our dedicated team on 0208 290 9099, or email CM@AnthonyJones.com.
