Can Taxi Drivers Claim Road Tax (VED)?
Vehicle Excise Duty (road tax) is compulsory for all vehicles on public roads. For taxi drivers, it is a straightforward allowable business expense.
Yes - road tax (ved) is an allowable business expense for UK taxi and private hire drivers.
What You Can Claim
- Vehicle Excise Duty (VED) for your taxi vehicle
- Road tax for a second vehicle used in your taxi business
- Business proportion of VED if vehicle is mixed-use
What You Cannot Claim
- Road tax on a vehicle not used for taxi work
- SORN (Statutory Off Road Notification) - no cost involved
- Late payment penalties on VED
- Fines for driving without valid road tax
Typical Annual Range
£150 - £600 per year
Average annual spend by UK taxi drivers on road tax (ved). Your actual costs may vary depending on location, hours worked, and vehicle type.
HMRC Rules
VED is fully deductible as a business expense if the vehicle is used exclusively for business. For mixed-use vehicles, apportion the cost based on business usage percentage. The cost is claimed in the tax year it relates to. If you pay monthly via direct debit, each payment is deductible in the month it falls.
Maximise Your Road Tax (VED) Deductions
Electric vehicles currently have zero VED - another reason to consider switching
Paying VED annually saves around 10% compared to monthly direct debit
Keep your V5C logbook updated with correct details for your records
Frequently Asked Questions
Common questions about claiming road tax (ved) on your tax return
My vehicle is used 50/50 for business and personal. How much can I claim?
You can claim 50% of the VED cost. Base your split on actual mileage records showing the proportion of business vs personal use.
I bought a new car mid-year. Can I claim the full VED?
You can claim the VED for the period the vehicle was used for business. If you owned it for 6 months and used it entirely for business, claim 6 months of VED.
Is VED included in the mileage allowance?
Yes. If you use the simplified mileage allowance (45p/25p per mile), VED is already included and cannot be claimed separately.
Track Your Road Tax (VED) Expenses Automatically
Fyled makes it easy to record, categorise, and claim all your taxi expenses. See exactly how much tax you will save.