Roaring through the city streets, delivery drivers hustle to meet deadlines, but behind the thrill lies a crucial question: do they pay taxes? Buckle up as we unveil...
With the lure of flexible working, being your own boss, and earning higher-than-average pay, delivery driver jobs are in high demand and provide the UK with an invaluable, on-demand service that we have all become dependent on.
However, with long working hours and 7-day working weeks, understanding delivery driver tax and pay responsibilities has understandably taken a back seat.
This comprehensive guide covers a multitude of areas and answers questions such as how much a delivery driver gets paid, how a delivery driver pays tax, and what delivery driver expenses they can claim on their tax return.
Are delivery drivers self-employed or employed?
Not all delivery drivers are made equal, and it is important to first determine the tax classification that applies to delivery drivers in the UK. The classification typically depends on whether the delivery driver is considered self-employed or an employee.
Self-employed delivery drivers
Typically, in the UK, a large majority of delivery drivers operate as self-employed individuals, which means that you’re responsible for managing your taxes, National Insurance contributions, and other financial affairs.
Managing your tax affairs may be one of the downsides of being a self-employed delivery driver; however, there are also some benefits. Benefits include greater flexibility in working hours, as well as potential tax deductions.
Employed delivery drivers
If you are an employed delivery driver, you work under a contract with your employer, and one of the major differences, when you are employed, is that your tax and National Insurance contributions are typically deducted by your employers through the PAYE (Pay As You Earn) system.
Employed delivery drivers have less flexibility since they will probably be told by their employer when they will have to work; however, you do get a consistent wage each week, holiday and sick pay, as well as other benefits.
How do delivery drivers pay tax?
When a delivery driver is self-employed, as I have already mentioned, they have certain tax obligations and responsibilities that they have to comply with to avoid getting into trouble with HMRC.
How do delivery drivers register for self-assessment?
If you decide to deliver parcels for a living and you are self-employed, you must register for self-assessment with HM Revenue & Customs (HMRC). Once registered, you’ll receive a Unique Taxpayer Reference (UTR) number, which you’ll use to file your tax returns. Alternatively, if you contact an accountant, they will be able to help you with this step.
Should I keep records of delivery driver pay?
Probably one of the most important steps for self-employed delivery drivers is to keep up-to-date records of how much they get paid and what expenses they have. Delivery driver expenses can include things such as:
Delivery insurance for your van or car
Vehicle maintenance
Fuel
It is important to keep up-to-date records of delivery driver expenses, as they can be included in the tax return you have to submit each year. Expenses can lower your taxable delivery driver’s pay and may result in a smaller tax bill at the end of the tax year.
Do delivery drivers pay tax?
Much like an employed person will pay income tax on the money they earn from their employer, self-employed delivery drivers pay are liable for income tax on their profits. The difference, however, between an employed person and a self-employed delivery driver is that they deduct their expenses from their pay and then are taxed on the profits that are left.
Do I need to pay national insurance contributions as a delivery driver?
Delivery drivers pay may also have national insurance contributions deducted from their profits, which go towards things like their pension or maternity allowance. National insurance contributions are calculated as part of your self-assessment tax return, which you can ask an accountant to complete.
Is it worth registering for VAT as a delivery driver?
If your yearly revenue reaches the VAT threshold (currently £85,000), you may need to register for and charge VAT on your services. However, typically, most delivery drivers are unlikely to surpass this amount.
When do delivery drivers pay tax?
Delivery driver pay is not taxed when they receive it; instead, they must ask an accountant to complete a self-assessment tax return for the tax year, which covers the period from April 6th to April 5th of the following year. The self-assessment tax return must be filed by January 31st January the following year, after the tax year closes on 5th April.
For example, you start working as a delivery driver in June 2024, which falls within the tax year April 6th 2024–April 5th, 2025. You must complete your tax return and pay any tax that might be due by 31st January 2026.
It is a good idea throughout the year to save some of your delivery driver pay in case you have any tax to pay at the end of the tax year. Typically, a good figure to save would be about 25% of your pay to cover income tax and national insurance contributions.
For example, if you work full-time and earn approximately £600 per week, it may be beneficial to save 25%, which is £150 per week for tax. For more advice on self-employment, it is always a good idea to speak to an accountant who can guide you through the best practices.
What expenses can be claimed from the delivery driver’s pay?
If you are a self-employed delivery driver, one of the benefits compared to being employed is that you can claim expenses from your taxable pay. This will help reduce the amount of tax you pay in a tax year.
Here are some of the expenses you can claim on your self-assessment tax return:
Professional fees: You will need to have an accountant who can manage your delivery driver pay and expenses. The fees the accountant charges you are allowable expenses.
Mobile monthly bill: You likely use your phone during the day for business purchases. The good news is that you can claim a portion of the bill as an expense on your tax return.
Vehicle expenses: running a car or van for delivery work is not cheap, but costs for things such as fuel, road tax, MOT, insurance, and maintenance can all be claimed as expenses.
Other business-related expenses: If you have to purchase protective clothing or equipment, or even a uniform, these are classified as allowable expenses.
Disclaimer: Expenses must be directly related to your business, and it is important to keep records and receipts in case you are investigated by HMRC. Please be aware that claiming non-business-related expenses may result in a fine or penalty, so it is always recommended that you speak to an accountant who can advise you on the best way to claim expenses.
How much is delivery driver pay?
Knowing how much delivery drivers pay per hour, month, or year is very important since it allows you to plan and budget financially. For example, it allows you to make an informed decision about whether your expenses will be covered by the amount you are paid.
It also allows you to negotiate with the company you decide to work for since you can do a pay comparison with other companies or platforms. Below is the most recent self-employed delivery driver pay in the UK:
Hourly Rate: According to talent.com, the average hourly rate for delivery drivers is around £17.33 to £17.96. (website)
Annual Rate: Furthermore, according to talent.com, the average annual salary for a self-employed delivery driver is around £33,800 to £35,020. (website)
It is important, however, to consider that the figures mentioned above are averages, and delivery driver pay may differ and could be determined by factors such as the number of deliveries you complete.
Other factors that could affect delivery driver pay are the company you work for, your location, and sometimes the amount of experience you have.
Conclusions on delivery driver pay and tax
As you will see from this article, self-employed delivery driver pay can vary, but on average, you can expect to earn approximately £17 per hour. Bear in mind that this can differ depending on location, the number of hours worked, and the number of deliveries made.
A self-employed delivery driver also has a lot more responsibility in comparison to a delivery driver who is employed. Each year, a self-assessment tax return must be prepared and filed with HMRC, which includes your income and expenses. Failure to submit a self-assessment tax return can result in fines and penalties, so it is advised that you speak to an accountant for help.
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With the lure of flexible working, being your own boss, and earning higher-than-average pay, delivery driver jobs are in high demand and provide the UK with an invaluable, on-demand service that we have all become dependent on.
However, with long working hours and 7-day working weeks, understanding delivery driver tax and pay responsibilities has understandably taken a back seat.
This comprehensive guide covers a multitude of areas and answers questions such as how much a delivery driver gets paid, how a delivery driver pays tax, and what delivery driver expenses they can claim on their tax return.
Are delivery drivers self-employed or employed?
Not all delivery drivers are made equal, and it is important to first determine the tax classification that applies to delivery drivers in the UK. The classification typically depends on whether the delivery driver is considered self-employed or an employee.
Self-employed delivery drivers
Typically, in the UK, a large majority of delivery drivers operate as self-employed individuals, which means that you’re responsible for managing your taxes, National Insurance contributions, and other financial affairs.
Managing your tax affairs may be one of the downsides of being a self-employed delivery driver; however, there are also some benefits. Benefits include greater flexibility in working hours, as well as potential tax deductions.
Employed delivery drivers
If you are an employed delivery driver, you work under a contract with your employer, and one of the major differences, when you are employed, is that your tax and National Insurance contributions are typically deducted by your employers through the PAYE (Pay As You Earn) system.
Employed delivery drivers have less flexibility since they will probably be told by their employer when they will have to work; however, you do get a consistent wage each week, holiday and sick pay, as well as other benefits.
How do delivery drivers pay tax?
When a delivery driver is self-employed, as I have already mentioned, they have certain tax obligations and responsibilities that they have to comply with to avoid getting into trouble with HMRC.
How do delivery drivers register for self-assessment?
If you decide to deliver parcels for a living and you are self-employed, you must register for self-assessment with HM Revenue & Customs (HMRC). Once registered, you’ll receive a Unique Taxpayer Reference (UTR) number, which you’ll use to file your tax returns. Alternatively, if you contact an accountant, they will be able to help you with this step.
Should I keep records of delivery driver pay?
Probably one of the most important steps for self-employed delivery drivers is to keep up-to-date records of how much they get paid and what expenses they have. Delivery driver expenses can include things such as:
It is important to keep up-to-date records of delivery driver expenses, as they can be included in the tax return you have to submit each year. Expenses can lower your taxable delivery driver’s pay and may result in a smaller tax bill at the end of the tax year.
Do delivery drivers pay tax?
Much like an employed person will pay income tax on the money they earn from their employer, self-employed delivery drivers pay are liable for income tax on their profits. The difference, however, between an employed person and a self-employed delivery driver is that they deduct their expenses from their pay and then are taxed on the profits that are left.
Do I need to pay national insurance contributions as a delivery driver?
Delivery drivers pay may also have national insurance contributions deducted from their profits, which go towards things like their pension or maternity allowance. National insurance contributions are calculated as part of your self-assessment tax return, which you can ask an accountant to complete.
Is it worth registering for VAT as a delivery driver?
If your yearly revenue reaches the VAT threshold (currently £85,000), you may need to register for and charge VAT on your services. However, typically, most delivery drivers are unlikely to surpass this amount.
When do delivery drivers pay tax?
Delivery driver pay is not taxed when they receive it; instead, they must ask an accountant to complete a self-assessment tax return for the tax year, which covers the period from April 6th to April 5th of the following year. The self-assessment tax return must be filed by January 31st January the following year, after the tax year closes on 5th April.
For example, you start working as a delivery driver in June 2024, which falls within the tax year April 6th 2024–April 5th, 2025. You must complete your tax return and pay any tax that might be due by 31st January 2026.
It is a good idea throughout the year to save some of your delivery driver pay in case you have any tax to pay at the end of the tax year. Typically, a good figure to save would be about 25% of your pay to cover income tax and national insurance contributions.
For example, if you work full-time and earn approximately £600 per week, it may be beneficial to save 25%, which is £150 per week for tax. For more advice on self-employment, it is always a good idea to speak to an accountant who can guide you through the best practices.
What expenses can be claimed from the delivery driver’s pay?
If you are a self-employed delivery driver, one of the benefits compared to being employed is that you can claim expenses from your taxable pay. This will help reduce the amount of tax you pay in a tax year.
Here are some of the expenses you can claim on your self-assessment tax return:
Disclaimer: Expenses must be directly related to your business, and it is important to keep records and receipts in case you are investigated by HMRC. Please be aware that claiming non-business-related expenses may result in a fine or penalty, so it is always recommended that you speak to an accountant who can advise you on the best way to claim expenses.
How much is delivery driver pay?
Knowing how much delivery drivers pay per hour, month, or year is very important since it allows you to plan and budget financially. For example, it allows you to make an informed decision about whether your expenses will be covered by the amount you are paid.
It also allows you to negotiate with the company you decide to work for since you can do a pay comparison with other companies or platforms. Below is the most recent self-employed delivery driver pay in the UK:
It is important, however, to consider that the figures mentioned above are averages, and delivery driver pay may differ and could be determined by factors such as the number of deliveries you complete.
Other factors that could affect delivery driver pay are the company you work for, your location, and sometimes the amount of experience you have.
Conclusions on delivery driver pay and tax
As you will see from this article, self-employed delivery driver pay can vary, but on average, you can expect to earn approximately £17 per hour. Bear in mind that this can differ depending on location, the number of hours worked, and the number of deliveries made.
A self-employed delivery driver also has a lot more responsibility in comparison to a delivery driver who is employed. Each year, a self-assessment tax return must be prepared and filed with HMRC, which includes your income and expenses. Failure to submit a self-assessment tax return can result in fines and penalties, so it is advised that you speak to an accountant for help.
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