Taxi Driver Tax Calculator
Estimate how much tax you'll pay as a self-employed taxi driver - Updated for 2026/27
Working out your tax bill as a taxi driver
Whether you’re driving for a private hire firm, a ride-sharing app, or working your own patch as a licensed taxi driver, being self-employed means you’ll need to set aside money to cover your tax bill yourself.
Our free calculator uses this to estimate how much Income Tax and National Insurance you’ll owe, so you can plan ahead and avoid a scramble when your bill is due. For simplicity, the calculator assumes any additional income hasn’t already been taxed.
Enter your total earnings from driving, any related business expenses (think fuel, licensing, vehicle costs and repairs), and any other income you get in the same tax year.
Need more help? Read our article about tax returns for taxi drivers.
Why does the calculator mention Payments on Account?
Payments on account are advance instalments towards your next tax bill. You’ll need to pay these in addition to this year’s bill if it’s more than £1,000, or if PAYE and other deductions at source covered less than 80% of what you owed.
They’re supposed to help you spread your tax payments across the year, but they can catch taxi drivers out the first time around, especially if this is your first tax return after leaving employed shifts to run your own cab business.
Our calculator factors payments on account into your estimate to help you plan ahead.
FAQs
Yes, drivers who work as a self-employed sole trader must register for Self Assessment.
The process of applying for or renewing a taxi licence involves a tax-registration check to confirm everything is set up. Make sure you register by 5th October in your second tax year of trading. For example, if you started as a self-employed driver in 2025/26, then you should register before 5th October 2026.
It depends how you file. Paper returns are due by 31st October, and online returns have a bit longer, due by 31st January. For the 2025/26 tax year, that’s 31st October 2026 for paper, or 31st January 2027 to file online.
The key deadline is 31st January. You might also need to make a second payment by 31st July if payments on account apply to you.
Plenty of your running costs are likely to be allowable, including fuel, repairs, licensing and registration fees, insurance, breakdown cover, and a portion of your phone bill. You can also claim mileage using simplified expenses for miles driven while on shift, though this doesn’t apply to black cabs, which are treated as commercial vehicles. Your dedicated accountant will ask for the details of your all your expenses, and go through everything to make sure you don’t miss out!
Claiming every allowable expense you’re entitled to is the simplest way to reduce your bill, along with any reliefs or allowances that apply to you. If you’re weighing up the tax impact of driving as a sole trader versus through a limited company, our company vs sole trader calculator can help you compare.
Yes, if you are a sole trader – although when will depend on how much you earn. Find out if you need to file a Self Assessment or sign up to MTD Income Tax here.
Looking for more information?
We have a comprehensive range of free resources available
Bookkeeping Guide
Learn the basics of bookkeeping to help you stay on top of the finances and make well-informed decisions in your business.
4 minutes
Claiming Business Expenses Guide
The topic of what business expenses you can claim for is a complex one. Let our easy to understand guide explain it for you.
5 minutes
Quick Tax Saving Tips Guide
Our guide to helping you and your business save money and operate in the most tax efficient way possible.
2 minutes
Hot off the press
What Happens If I’m VAT Registered and Sell Through an Online Marketplace?
24 September 2026
Read More
