If you’re one of the many people that has a side hustle in the gig economy, you may be asking yourself, do Uber Eats drivers pay tax in the UK?

This is one of the major mis-understandings self employed Uber Eats delivery drivers have about working in the gig economy.

This post will answer some of the important questions you may have about working in the gig economy, such as do Uber Eats drivers pay tax or are Uber Eats drivers self employed? Answering these questions will ensure you are more informed, and most importantly working legally in the UK.

What is Uber Eats delivery?

Developed by Uber Technologies Inc, the Uber Eats delivery platform allows customers to browse menus from restaurants in their local area, order food, which is then collected and delivered by independent delivery drivers to the customers home.

Whats it like working as a Uber Eats delivery driver?

Whether you work full time or part time for Uber Eats, one of the major appeals is the flexibility to choose when you work and for how long. This enables people who may have another job, study or family commitments to fit work around other responsibilities.

Uber eats drivers also have a lot independence since you are not tied to a boss, allowing them to feel more in control of what they do.

Is Uber Eats a good side job?

If you have a full job but want to start a side hustle as a way to make money on the side, Uber Eats is a great option, especially as you can easily get started delivering food on just a bicycle.

Delivering food on a bicycle is also a great way to get started as you dont have to spend a lot of money to get on the road working, like you would if you was using a moped/scooter or even a car.

Uber Eats is also one of the best car side hustles for people looking for additional work. This is because you may already have a car which you only use to travel to work and back. By using it to work for Uber eats, you are maximising not only your potential, but also that of your car by reducing down time.

Do Uber Eats drivers pay tax?

Having a clear understanding about tax and your responsibilities, will not only help with your finance planning, but will also help you to avoid penalties for not filling a tax return, and even claiming tax back from your expenses.

Are Uber Eats drivers self-employed?

It important to understand that when you work for Uber Eats, you are classified as self-employed.

Similar to other delivery platforms such as Deliveroo or Just Eat, Uber Eats drivers pay has not been taxed at source (like you would if you was employed), which means you are responsible for declaring your Uber Eats pay to HMRC.

You also have responsibility for making payments of tax and national insurance contributions to HMRC by completing a self-assessment tax return.

Does Uber Eats and Uber inform HMRC?

The short answer is yes. With such a large number of people now working a side hustle, it was only a matter of time before HMRC started asking questions as to why Joe Bloggs was no longer paying any tax.

Uber also have a responsibility to notify HMRC who are working for them and upon request have to provide details of riders and drivers.

The one caveat is HMRC have limited resources and may not be able to investigate everyone, but increasingly people are being investigated years after the period they were working, resulting in major fines as well as having to pay back unpaid tax.

How do I avoid paying taxes with Uber and Ubereats?

If you want to avoid paying tax on income your earn you simply don’t submit a tax return to HMRC. This approach is very risky and may result in you being investigated later if your not able to explain why you have not declared income or paid any tax or national insurance contribution.

A less risky approach would be to either set up as self employed or have a limited company and declare your income this way.

This is because you can use the products and services you buy to do your job to reduce any tax that might be due.

For example the car rental payments each month will be used to reduce any tax that is due. It is possible that someone earning £18,000-£28,000 per year may not have to pay tax on this income.

What happens if you don’t report Uber Pay?

If you decide not to report your Uber Eats pay or the money you get from a side hustle, you run the risk of being investigated by HMRC for unpaid tax, which may result in prosecution, and in some cases imprisonment.

However, the majority of time, if you are found to have not paid tax on your Uber pay, you will have to pay interest, and large penalties on top of any outstanding tax.

How much does Uber Eats Pay?

It is important to understand how much Uber Eats pay for several reason;

• Financial planning: it will allow you to see if you Uber Eats pay will meet your financial needs. After all you don’t want to invest money into working for Uber Eats if the costs of getting on the road are more than your income.
• Income comparison: Understanding what Uber Eats pay is per hour, day or week will enable you to see how it compares to other platforms such as Deliveroo. It even allows you to see how it may compare to other employment work.
• Expenses consideration: If you deliver food Uber Eats in a car or motorcycle you are going to have to pay for fuel and insurance which may be some of your biggest cost. If you know how much you can potentially earn by the hour or day, you can evaluate if your Uber Eats pay covers your expenses.

How much does Uber Eats pay per hour?

A recent post i wrote did a comparison of Ubereats, Deliveroo and Justeat income in the UK, and showed that Uber Eats driver pay was between £7-14 per hour. This of course is dependent on location, time of year and the number of drivers available.

If you enjoy driving for a living, did you know that you can now earn £13-£17 per hour as a self-employed Amazon Flex delivery driver.

How much tax do I pay on £12,000 Income?

If you earn up to £12,000 you will not have to pay any tax. This is because you have a personal tax allowance of £12,570 which means you don’t pay tax on this amount. Once you earn over £12,570 tax may be due.

One of the misconception self employed people have is because they don’t earn over £12,570 they don’t have to be registered as self employed and file a tax return. This is completely false and you must registered as self employed and file a tax return on income under £12,570.

Can I write off my car payment if I drive for Uber?

The vehicle you use to make deliveries or take on passengers is classed as a business asset and means a proportion of costs associated with it are tax deductible. This includes insurance, vehicle tax and maintenance and repairs. For more information about what expenses can be claimed please click the link.

Can I work for Uber Eats and Uber have a full time job?

This is a popular question and the short answer is yes. Many people who have a full time job also work as an Uber driver or deliver food for Uber Eats in their spare time which is also known as a side hustle.

If you are employed by an employer the good news is that the salary you earn through PAYE means your Tax and National Insurance contributions are taken care of.

However, if you decide to work for Uber or Uber Eats the income you receive is untaxed and must be declared to HMRC.

You must register as self employed and file a tax return each tax year. I recommend you speak to Ugo Tax who specialises in self employed delivery driver tax returns.

Benefits of working for Uber Eats?

One of the major benefits of working for Uber as a side hustle or even full time, is the option to choose when you work. Choosing when to start and finish is really helpful if you have children and need to manage childcare.

You may also have a full time job and want to make money on the side, so working in your free time can be as easy as logging into the app.

Another benefit to working for Uber Eats or as an Uber Driver is that you may already have a vehicle that can be used to deliver food or drive passengers to their destination. If you are using a bicycle for food delivery this is going to be a quick way of starting to earn some extra cash delivering food with Uber Eats without the need for insurance.

If you want to use a scooter or car to make deliveries you will need hire and reward insurance. The same applies if you want driver passengers with Uber. If you have insurance in place a the moment you may want to speak to your insurance provided to see what options you have.

As we have already mentioned you have to file a tax return each year to HMRC, which basically tells them how much money you earned from Ubereats and Uber. A benefit of filling your tax return each year is that you can claim back expenses you have which relates to your work, and reduces your overall tax bill.

Some examples include; Vehicle servicing, protective equipment or parking charges. You can learn more about what you can claim by reading this post about 15 Expenses Ubereats And Uber Drivers Can Claim here.

This post about do Uber Eats drivers have to pay tax in the UK is part of a series of posts I have written about gig economy workers. Another post you may find helpful explains What expenses an Uber Eats Driver claim as part of their tax return.

If you need help with registering as self-employed, or need to file a tax return we recommend you contact Ugo Tax.

27 tips to make more money with Uber Eats and Deliveroo

Frequently asked questions about Uber Eats pay, tax and working.

Uber Eats Tax:

Do you have to pay tax on Uber Eats tips from customers?

Earning tips is definitely one of the perks of the job, and while it is never certain that you will get a tip from a customer, you may wonder if you have to pay tax on it?

The answer is Yes, any tips you receive from the customer via the app must be declared as income and is therefore taxable.

Are Ubereats drivers self employed?

Yes, Ubereats drivers are classed as self employed which means you have to register with HMRC and submit a tax return at the end of each tax year, which declares any income you earn over £1000.

Do Uber Eats drivers pay tax?

Uber Eats drivers in the UK are self employed and therefore must be registered as self employed, and pay tax at the end of the tax year. This is because Uber does not withhold taxes from the income you earn as a driver, which is why you require an accountant to submit a tax return to HMRC.

How does a Uber Eats driver show proof of income?

If you need to show proof of income you earned working for Ubereats the best way to do this is to file a tax return. This can be done by yourself or by an accountant.

Does Uber Eats pay drivers fuel?

No. It is the responsibility of Ubereats and Uber drivers to pay for their own fuel. This is classed as a business expense, and is tax deductible.