How an Accountant Can Help Uber Drivers to Save Taxes

While being an Uber driver means flexibility, it also has its fair share of financial responsibilities. Unlike traditional employees, Uber drivers are self-employed, which means they are responsible for reporting their income, filing a tax return, and claiming the deductions for which they are eligible. Now, they don’t have a clear understanding of tax rules. So, they easily overlook their deductions or miscalculate their tax obligations. Now, if you too are an Uber driver, you must learn the multiple ways an Uber driver accountant can help uber drivers to save taxes. 

Claim the Expenses 

Perhaps one of the primary tasks an Uber driver accountant does is to claim the expenses. No doubt you will remember to claim the fuel costs, phone bill and vehicle maintenance and repair costs, but still there are many that you sometimes overlook. Some of these expenses are insurance costs, Uber commissions, accountancy fees, etc. Remember, if you are using dash-cams or some in-car equipment for work, you can also claim for their costs. It is also possible to choose the mileage allowance instead of tracking fuel and repairs separately. HMRC allows a 45p per mile deduction for the first 10,000 miles and 25p per mile for any additional mileage beyond that.

Handle Bookkeeping and Tax Returns 

Every taxpayer must keep track of income and expenses, and an Uber driver is no exception.  A skilled accountant not only does the same but also ensures that you don’t miss deadlines for tax returns. With an accountant, you will never have to worry about HMRC penalties for late submissions.

Advises on VAT Registration (If needed)

If your annual Uber earnings become more than £90,000, you may need to register for VAT. However, you may be unaware that voluntary VAT registration under schemes like the Flat Rate VAT Scheme could save you money. Under this scheme, you need to pay a fixed VAT rate to the HMRC. Only an accountant can advise you about the best approach for VAT registration. 

Leverage Writing Down Allowance

Uber drivers use their cars for business purposes. This makes their car qualified as “plant and machinery” for leveraging the writing down allowances (WDA) which are nothing but capital allowances. If you purchase a business car with CO2 emissions not more than 50g/km, you qualify for WDA at the main pool rate of 18%. However, you may end up buying a car that emits more than 50g/km CO2, it falls into the special rate pool and you qualify for WDA at a special rate pool of 6%.

Protect from HMRC Audits

Believe it or not, tax investigations are extremely stressful. An accountant ensures your records are HMRC compliant which means fewer headaches in case of an investigation. 

While it’s tempting to handle everything without seeking any professional help, mistakes (if any) can prove costly. Misreporting expenses, missing deductions, or filing late can lead to unnecessary tax bills or penalties. A specialist accountant ensures that you are claiming everything you’re entitled to and staying compliant with HMRC regulations.

Driving for Uber gives you freedom, but taxes shouldn’t eat into your profits. A professional Uber driver accountant ensures you pay the least tax possible, stay compliant, and avoid unnecessary stress. He can suggest innovative ways of reducing your taxable income like contributing to a SIPP or taking advantage of the £1,000 trading allowance to reduce your taxable income and help save for retirement.

If you’re an Uber driver in the UK, it is time to take the stress out of your taxes. Contact our Coreadviz team today for expert help and keep more of your earnings in your pocket! We have skilled accountants in our team who totally understand your challenges as an Uber driver. We know that while working for long hours, you have no time to indulge in these complexities.