Driving self-employed gives you flexibility and a higher headline rate — but you handle your own tax. It's more straightforward than it sounds. Here's what you need: a UTR, an annual Self Assessment, a record of your income and expenses, and an understanding of self-billing.
This is general information to help you get oriented, not tax advice. Tax rates and thresholds change each year — always check the current figures on gov.uk, or speak to an accountant about your situation.
1. Register as self-employed and get your UTR
Most drivers work as a sole trader. You register for Self Assessment with HMRC, and they issue you a Unique Taxpayer Reference (UTR) — a 10-digit number you'll use on your tax return. Register as soon as you start working for yourself; there's a deadline of 5 October following the end of the tax year in which you started.
2. Keep records of income and expenses
Keep a record of everything you earn and the costs of doing the work. Allowable expenses reduce the profit you pay tax on. For drivers, the big one is your vehicle, and you generally pick one of two methods:
- Simplified mileage: claim a flat HMRC rate per business mile — currently 55p for the first 10,000 business miles and 25p after that (cars and vans, from 6 April 2026) — instead of working out your actual running costs.
- Actual costs: claim the business proportion of fuel, insurance, repairs, and so on. More record-keeping, sometimes more relief.
Other typical expenses include hire-and-reward insurance, your phone, and protective gear. Keep receipts and a simple spreadsheet — it makes your return painless.
3. File a Self Assessment each year
Once a year you file a Self Assessment tax return reporting your income and expenses. The online filing and payment deadline is 31 January following the end of the tax year (which runs 6 April to 5 April). You pay Income Tax on your profit above your personal allowance.
4. National Insurance
Self-employed drivers pay Class 4 National Insurance on profits above a threshold, collected through Self Assessment alongside your Income Tax. The rules around Class 2 have changed in recent years, so check the current position on gov.uk — but the practical point is the same: it's handled through your annual return, not deducted weekly.
5. Do you need to register for VAT?
Only if your turnover goes over the VAT registration threshold (a high figure — most drivers are nowhere near it). If you are VAT-registered, tell your platform during setup so VAT is handled correctly on your invoice. See typical driver earnings to gauge where you'd sit.
6. What is self-billing?
Normally you'd raise an invoice for the work you do. With self-billing, the agency raises the invoice on your behalf — an HMRC-recognised arrangement that needs a self-billing agreement in place. It means you don't chase paperwork: every shift, depot and hour is recorded for you, giving you a clean trail for your accountant and your tax return.
FlexiDriver issues self-billing invoices automatically and pays weekly by Bacs, so your records build themselves while you focus on driving.
A quick word on IR35
You may have heard of IR35. It mainly applies to people working through their own limited company (a "personal service company"). If you're a genuine sole-trader driver choosing your own shifts, areas and hours across multiple clients, you're operating as self-employed. If you ever work through a limited company, that's when to take specific advice on status.
Get started the right way
New to this? Read how to become a self-employed driver for the full setup, or create your driver account with FlexiDriver and we'll help you get going.