Uber Driver Expenses: Fuel, Cleaning and Phone Costs

Fuel, cleaning and your phone are some of the biggest day-to-day costs for an Uber driver. They are also some of the easiest to get wrong on a tax return. Claim too little and you overpay tax. Claim in the wrong way and you risk questions from HMRC. This guide covers how to treat each one, and how to choose between actual costs and simplified mileage.

Key takeaways

• Choose one method per vehicle: actual running costs or simplified mileage. You cannot claim fuel and mileage together.
• Cleaning and valeting are claimable under the actual costs method, but are normally covered by the mileage rate.
• Your phone and data costs are claimable in proportion to business use.
• Keep a mileage log, receipts and bank statements to back up every figure.
• Check current rates and rules on GOV.UK rather than relying on old advice.

What counts as a business expense for a driver?

As a self-employed driver, you can deduct costs that are incurred wholly and exclusively for your trade. Costs that are partly private need a sensible split. Our guide to sole trader allowable expenses covers the general rules, and the Uber driver tax return guide shows where each figure goes on your return.

Fuel: actual costs or mileage?

You have two options for your vehicle costs. With actual costs, you add up what you spent on fuel, insurance, repairs, servicing, road tax and similar items, then claim the business share. With simplified expenses, you claim a set rate per business mile, which is meant to cover those running costs. You usually need to pick one method for a vehicle and keep it, so it is worth comparing before your first return. HMRC sets out the current simplified mileage rates on GOV.UK's vehicle expenses page.

Cleaning and valeting

A clean car matters in a passenger business, and the cost is normally an allowable expense. If you use the actual costs method, claim the business proportion of car washes, valeting and cleaning products. If you use simplified mileage, these costs are generally treated as already covered, so adding them on top would be double counting. Keep receipts or bank statement entries either way.

Your phone and data

A smartphone is essential to work on the app. You can usually claim the business part of your handset costs, contract and data. If you have a separate phone used only for work, you can generally claim it in full. If you use one phone for everything, estimate a fair split and keep a note of how you reached it. Phone accessories such as a mount or charger are usually claimed in the same way. If you buy a handset outright, capital allowances rules may apply rather than a simple expense claim. Ask us if you are unsure.

Comparing the two methods

Worked example (illustrative)

"Tariq", an illustrative example, drives for Uber full time. He keeps a simple mileage log in a notes app, saves his fuel receipts and photographs his car wash slips. At the end of the year, his accountant compares both routes. Claiming actual costs, he can add up fuel, cleaning, servicing and insurance, then apply his business-use percentage. Claiming simplified mileage, he multiplies his business miles by the HMRC rate. The accountant picks whichever gives the more accurate result for his car. Tariq also claims the business share of his phone contract, after estimating that around three quarters of his usage is work related. The numbers will differ for every driver, so this is a method rather than a figure to copy.

Common mistakes

• Claiming fuel and mileage together. This double counts the same cost.
• Claiming 100% of a personal phone. Only the business share is allowable.
• No mileage log. Estimates made years later are hard to defend. Record journeys as you go.
• Mixing up business and personal journeys. Commuting to a start point and personal trips are not business miles.
• Using last year's method without checking. Review each year in case the other method now gives a fairer result, and confirm any restrictions on switching with GOV.UK or us.

Our accounting service for Uber drivers handles expenses, mileage and your tax return together, so you only claim what is right for you. If you are also thinking about your tax position more widely, take a look at our personal tax service.