Tax Guide for Taxi Drivers in London
Everything you need to know about tax, licensing, and expenses as a taxi driver in London. Maximise your deductions and keep more of what you earn.
Average Annual Earnings
£45,000 - £65,000
Average Annual Mileage
25,000 - 35,000 miles
Example Tax Calculation for London
Based on average London taxi driver earnings and mileage
Total estimated tax: £4,987 - This is an estimate based on 2026-2027 tax rates and average figures. Your actual tax will depend on your specific income and expenses. Use Fyled's tax calculator for a personalised calculation.
Tax Tips for London Drivers
The London Congestion Charge (£15 per day) is a deductible business expense for every day you enter the zone for work
ULEZ charges are also deductible - consider upgrading to a compliant vehicle to avoid the daily £12.50 charge
Heathrow and City Airport pick-up charges are fully deductible
TfL licensing fees (currently around £300 for 3 years) are deductible in the year paid or spread across the licence period
The Knowledge study materials and examination fees are all tax-deductible
Frequently Asked Questions
Common tax questions from London taxi drivers
How much tax will I pay as a taxi driver in London?
On typical London earnings of £55,000 with around £15,000 in expenses and mileage allowance, your taxable profit would be roughly £40,000. After the £12,570 personal allowance, you would pay approximately £5,486 in income tax plus £1,646 in Class 4 National Insurance.
Can I claim the congestion charge on my tax return?
Yes. The London Congestion Charge is a fully allowable business expense. If you enter the zone 5 days a week, that is around £3,900 per year in deductions.
Do London black cab drivers need to do Self Assessment?
Yes. All self-employed taxi drivers must file a Self Assessment tax return with HMRC by 31 January following the end of the tax year. This applies to both black cab and private hire drivers.
What expenses are specific to London taxi drivers?
London-specific deductible expenses include the congestion charge, ULEZ daily charge, TfL licensing fees, Knowledge study costs, and higher parking charges at London stations and airports.
File Your Tax Return from London
Join thousands of London taxi drivers who use Fyled to track expenses, calculate tax, and file with HMRC - all from their phone.