Definitive List of Expenses to Claim as a PHV Driver in London during Self-Assessment

However, one of the main challenges that drivers face is the cost of running their business.

Read this blog to learn about PHV and PCO drivers’ allowable expenses on the self-assessment tax form and how to make the most of your claims.

##Expenses You Can Claim On Your Tax Return

If you’re using the PCO car for rent for your personal use, such as to commute to work or visit family, you can’t claim expenses on your taxes. You can only claim mileage or fuel costs for journeys to pick up and drop off your passengers.

Make sure to keep the receipts and all other records to monitor your travel expenses for taxes, so you can be sure that you’re eligible to claim your expenses for your tax season. Here are some of the expenses you can claim for tax season if you are an eligible driver with a PCO licence.

##Fuel Costs

The price of fuel at the time of purchase will be deducted from your total claims for the year as long as your trip has been verified by PCO—whether it’s diesel or petrol, or EV charging costs for your PCO electric car.

##Maintenance, MOT, and Repairs

Every PCO car driver has to pay vehicle excise duty in London every year. This is an annual payment that covers the cost of operating a car in the UK. It can also include parking charges if the passenger drives the car to a location and then needs to find a parking space to leave it while they’re away. You can use these deductions towards your annual tax bill.

##PCO Licence and Registrations

The licence and registration fees you paid when you first got your PCO license are tax deductible as well. PCO licence needs to be renewed every three years in the UK, which means you have to spend additional money to have your licence updated before it expires. All fees paid for renewals should be entered as a deduction on your tax return.

##PCO Car Insurance

All PHV drivers (and PCO drivers in London) must insure their cars before they can start driving. PCO car drivers can only drive passengers for profit if they are properly insured to drive their car legally. So make sure to keep all documents proving the insurance of your car.

##Loan Interest

If you have taken out a loan to buy a PCO vehicle, it can also be a part of your allowable expense claim. For example, if you borrowed money to buy a new car, you can include the interest on the loan when filing your taxes.

You can use the money that you earn from driving passengers to cover the cost of the loan so that you don’t have to pay interest on your full income.

##Home Office (if Applicable)

If you have a home office that you use to carry out your business activities, you can also claim deductions for this. This can include office equipment like computers and printers and utility bills for your home office, such as electricity, heating, or gas.

##Parking and Toll Charges

Tollbooth charges and parking fees are deductible expenses as long as you have receipts for them. You will also need to keep a record of your expenses to show proof of your expenses. To claim the cost of tolls, you will need to have a record of the number of miles that you have driven on the road and the number of toll booths you have passed through on your trip with the passengers. This is usually included in the distance travelled.

##First-Aid Kits Any modifications made to your PCO vehicle for your passengers must be declared in your tax documentation as well.

From first-aid kits to snow shovels for your ride with the passenger during the winter—various things can be deductible expenses for your self-assessment.

##Vehicle-Related Expenses You Can Claim

The good news? HMRC allows self-employed taxi drivers to claim a wide range of vehicle-related expenses.

Let’s break them down one by one, so you don’t miss a single pound you're entitled to.

##Fuel and Mileage Costs

Whether your cab runs on petrol, diesel, or electricity, the cost of filling up or charging can be claimed as a business expense. For those who prefer not to deal with receipts, there’s an alternative.

Actual fuel or charging costs: Keep fuel receipts or charging station invoices. Log vehicle usage to apportion private vs business miles.
Mileage allowance method: Instead of tracking every refuel, claim 45p per mile for the first 10,000 miles, then 25p thereafter (rates as of 2023/24). This flat-rate approach includes fuel, servicing, and wear and tear.

##Vehicle Maintenance and Repairs

Tyres wear out. Brake pads need replacing. Engines don’t run forever without oil. Every maintenance task performed to keep your vehicle roadworthy is deductible, if it relates to business use.

Routine servicing: Think oil changes, filter replacements, spark plugs.
Repairs: Includes worn tyres, engine work, suspension fixes, and even bodywork repairs after minor accidents—if used for business.
Breakdown support: Membership fees for roadside assistance services can also be included.

##Vehicle Insurance

You can only claim commercial vehicle insurance premiums. Standard personal car insurance doesn’t count, even if you're working part-time as a driver. If your provider offers a mixed-use or part-commercial policy, ensure business use is specified clearly on your documents.

Lease or Hire Purchase Payments

Not every driver owns their vehicle outright. If you lease your taxi or have it under a hire purchase agreement, you can claim a portion of the payment.

Only the business-use percentage applies. For example, if you use the car 80% for taxi fares and 20% for personal errands, only 80% of the lease cost is eligible.

Interest on hire purchase agreements is treated as a separate allowable cost. Road Tax and MOT

Whether you pay annually or monthly, road tax for your taxi is allowable. Likewise, MOT costs and any vehicle checks required by licencing authorities count toward your deductions—as long as they relate to your business vehicle.

Tip: Hold onto every invoice, receipt, and service log. When it’s time to file your tax return, those documents will prove each and every claim—no guesswork involved.

##Cut The Tax Bill: Claim Back Your Licensing and Legal Fees

Running your own taxi or private hire business means following the rules, and paying for the privilege. But here’s the good part: many of those compliance costs are fully deductible when it’s time to file your Self Assessment.

##Taxi License and Registration Fees

Whether you drive a black cab or operate under a private hire model, you pay to stay legal. HMRC recognises these costs as legitimate business expenses. That includes:

##Vehicle registrations specifically required for taxi use.

DVSA testing fees where applicable for vehicles operating under taxi terms. Add it all up, and you could be spending hundreds annually just to run within the law. Fortunately, every pound spent here reduces your taxable profit.

##Local Authority Charges and Private Hire Registrations

Many councils apply additional charges depending on where you operate, London, for example, has layers of regulation through Transport for London (TfL). These could include:

##Operator licenses for those running multiple vehicles.

Extra checks like background DBS certificates or topographical testing fees. Include them all. If you're paying it just so you can work legally in your area, it counts.

##Accountancy and Bookkeeping Costs

Hiring someone to keep the financial side of the business under control? HMRC allows the deduction of:

Professional accountant fees for preparing your tax return or offering financial advice.
Bookkeeping services such as monthly expense tracking or VAT reporting (if you’re registered).
Say you pay £600 a year to your accountant—record it. That’s £600 off your taxable profits. Doesn’t sound bad, right?

Even if you only use an accountant once at year-end, include it. The same goes for using apps or software subscriptions that help manage the numbers.

##Smart Communication & Operations Expenses You Can Deduct

HMRC allows several communication and operational costs to be claimed as allowable expenses, each one shaving down your tax bill with precision when documented correctly.

##Phone and Data Costs

If you use your mobile phone to talk to customers, receive bookings, or navigate routes using apps, you can claim a portion of your phone and mobile data bills. The key here is proportionality. For example, if analysis shows 70% of your mobile usage is business-related, then that 70% of the cost becomes deductible.

##Dispatch System Subscription Fees

Using a dispatch system to receive jobs in real time, such as Autocab or iCabbi? Those monthly charges fall squarely under business expenses. Whether the system is provided directly by a platform or a third-party integrator, every pound spent on secure, filtered ride offers can be written off.

##Booking Platform and Software Fees

Uber Driver App – The commission Uber deducts from fares isn’t the only deductible charge. If you subscribe to tools that enhance the platform—such as analytics dashboards, earnings optimisers, or scheduling apps—track and claim these fees.
Private Hire Operator Systems – Platforms like Free Now, Bolt, or Ola may charge service fees or software usage costs. These are directly connected to booking operations and fully deductible.
Navigation and Fleet Management Software – Subscriptions to apps like Waze Pro or fleet management services used for job dispatch, route optimisation, or vehicle performance tracking qualify too.

Anything you pay on a recurring basis to keep your operations fluid and your communications reliable counts. Just make sure to keep detailed monthly invoices or bank statements as evidence. If you're processing dozens of bookings daily, even a small recurring app charge can add up significantly over the tax year.

##On-the-Road Running Costs You Can Claim as a Taxi Driver

Every day behind the wheel brings with it a stream of small outgoings. Multiply them over a week, and the total gets serious. Fortunately, HMRC recognises many of these ride-by-ride expenses as allowable claims.

##Parking and Toll Charges

Stuck in city centre traffic or dropping off at the airport? Those pay and display tickets, congestion charges, and road tolls all count. HMRC accepts these costs because they're directly tied to business travel. Whether it’s a few pounds in the meter or a £12.50 congestion charge in Central London, keep the receipts. They add up fast, especially in high-density urban areas where parking enforcement operates aggressively.

##Pay and Display Tickets

If you're stopping briefly to let out a customer or picking up on the fly, you're likely racking up several short-stay fees per shift. These costs can sometimes exceed £10 in a single day. When recorded properly, they’re valid deductible expenses.

##Congestion and Road Charges

Running routes through London, Birmingham, or other low-emission zones? Congestion charges and clean air zone payments are classified as business expenses. For example, London’s Ultra Low Emission Zone (ULEZ) charges £12.50 daily for vehicles that don’t meet emissions standards. This charge is deductible as long as the trip was for work purposes.

##Professional Cleaning and Valeting

Nobody wants to step into a grimy cab. HMRC allows you to claim for regular cleaning costs that keep your vehicle presentable for clients. This includes:

##Exterior washes at drive-through car washes

Interior vacuuming and deep cleans
Professional valeting services, especially useful after a busy festival weekend or Friday night shift

Think about how often your car takes abuse—spilled coffee, muddy shoes, or worse. Claiming back the money spent on cleaning maintains not just the look of your vehicle, but the standards of your service.

##Office Supplies: The Little Things That Keep You Organised

Even if your “office” is your glovebox, these tools are essential for staying on top of bookings and income records. Claimable items include:

Stationery: Notebooks for jotting daily fares, logbooks to track mileage, and receipt books.
Pens and ink cartridges: Small but frequent purchases that add up over the year.
Business cards: Especially when you rely on word of mouth or repeat business.

If you use a home printer for receipts or invoices, the cost of printer paper and ink also counts as allowable expenses, provided they’re used solely for business purposes.

##Uniforms and Workwear That Meet Safety or Brand Expectations

You can’t claim for regular clothes, but what about items specific to the job or required by your operator?

Branded clothing: Tops, jackets or hats featuring your taxi service logo or colours, used solely for work.
Safety-related gear: High-visibility outerwear that’s required if you drive at night or in poor weather conditions.
Protective footwear or gloves: Accepted if mandated by health and safety standards or your licensing authority.

##Marketing and Advertising: Putting Your Name Out There

If customers can’t find you, they won’t book you. Marketing costs are 100% tax-deductible when used to promote your taxi business. This category covers:

Printed advertising: Flyers, brochures, and newspaper classifieds in your local area.
Digital outreach: Website domain and hosting fees, pay-per-click ads, and sponsored Facebook or Instagram posts targeted at locals.
Vehicle branding: The cost of applying magnetic signs or decals with your contact details and logo.
All marketing activity aimed at gaining customers or improving visibility qualifies — even a simple website or a Google Business listing supported by paid ads.

##Professional Development: Invest in Your Skills, Claim the Cost

Staying sharp on the road doesn’t end with getting your badge. When you spend money on becoming a better driver or keeping your licence valid, you can claim it.

CPD courses: Continuing professional development is fully tax-deductible when used to improve your taxi driving service.
Private hire assessments: Many councils require periodic testing — those fees count.
Advanced driving qualifications: Added training in fuel-efficient driving or passenger safety also qualifies as a claimable expense. Think about the last time you paid for a course to help improve your driving, service or compliance. If it made you a better business owner behind the wheel, it belongs on your tax return.

Contact us to find out more about the vehicle rental services we offer and how you can book a car rental today!

##FAQs on expenses to claim as a PHV driver

What expenses can PCO and PHV drivers claim on their tax return? You can claim fuel or charging costs, insurance, licence fees, vehicle repairs, MOT, road tax, and other business-related expenses directly tied to your driving work.

Can I claim fuel if I use my car for personal trips as well? No—you can only claim fuel or mileage costs for journeys related to passenger pickups and drop-offs, not personal use.

Is PCO car insurance tax-deductible? Yes. Commercial PCO insurance is an allowable business expense, but standard personal car insurance is not.

Can I include parking fees and congestion charges? Yes, parking, tolls, congestion, and clean-air zone charges can all be claimed if they’re incurred while working.

Do I need receipts for everything? Yes. Keep receipts, invoices, and logs of mileage or expenses—HMRC requires proof to support your claims.