Why Expense Tracking Matters
Proper expense tracking is the single most important thing you can do to reduce your tax bill as a self-employed delivery driver. Many drivers pay hundreds or even thousands of pounds more in tax than they need to simply because they don't track their expenses properly.
Average Savings with Proper Tracking
- 💷 Vehicle expenses: £800-£1,200/year
- 💷 Mileage allowance: £3,000-£6,000/year
- 💷 Phone & equipment: £300-£500/year
- 💷 Professional fees: £200-£400/year
- Total potential savings: £1,800+ per year
When you track expenses properly, you reduce your taxable profit, which means you pay less income tax (20-40%) and National Insurance (9-11%). Every £100 in legitimate expenses could save you £30-50 in tax.
Plus, accurate records protect you if HMRC ever investigates your tax return. Digital tracking (like MoneyMiles) makes this effortless and ensures you never miss a claimable expense.
HMRC-Compliant Expense Categories
HMRC allows you to claim wholly and exclusively business expenses - costs that are necessary for running your delivery business. Here's a comprehensive breakdown:
Vehicle Costs
- ✓ Fuel (business proportion)
- ✓ Insurance (business use policy)
- ✓ MOT tests
- ✓ Servicing and repairs
- ✓ Road tax (VED)
- ✓ Breakdown cover
- ✓ Vehicle cleaning
- ✓ Replacement parts
Technology & Equipment
- ✓ Phone contract (business %)
- ✓ Mobile data plan
- ✓ Phone accessories (mounts, chargers)
- ✓ Thermal delivery bags
- ✓ High-vis jackets
- ✓ Waterproof clothing
- ✓ Bike locks and lights
- ✓ Dash cam
Professional Services
- ✓ Accounting software (MoneyMiles)
- ✓ Accountant fees
- ✓ Business insurance
- ✓ Professional indemnity
- ✓ Bank charges (business account)
- ✓ Training courses
- ✓ Industry subscriptions
- ✓ Legal fees (business-related)
Other Business Costs
- ✓ Parking (while working)
- ✓ Tolls and congestion charges
- ✓ Ferry crossings (work-related)
- ✓ Advertising materials
- ✓ Stationery and printing
- ✓ Business cards
- ✓ Work-related travel
- ✓ Accommodation (overnight work trips)
Simplified vs Traditional Expenses
For vehicle costs, you can choose between two methods. You must use the same method for the entire tax year.
| Feature | Simplified Expenses | Traditional Expenses |
|---|---|---|
| How it works | Fixed rate per mile (45p/25p for cars) | Claim actual costs with receipts |
| Record keeping | Track mileage only | Keep all receipts and invoices |
| What you can claim | All vehicle running costs included in rate | Fuel, insurance, repairs, depreciation |
| Best for | High mileage drivers (10,000+ miles/year) | Low mileage or expensive vehicle costs |
| Admin effort | ⭐⭐⭐⭐⭐ Very easy | ⭐⭐ More complex |
| Typical savings | £3,000-£6,000/year (15,000 miles) | Varies based on actual costs |
💡 Recommendation for Most Drivers
Use simplified mileage expenses (45p per mile) if you drive 10,000+ business miles per year. It's easier to manage, requires no receipts for vehicle costs, and usually provides better tax relief.
You can still claim other business expenses (phone, insurance, equipment) on top of simplified mileage.
Receipt Management Best Practices
HMRC can request to see evidence for any expenses you claim. Proper receipt management protects you and ensures you don't miss out on legitimate deductions.
1Go Digital Immediately
Take photos of receipts as soon as you receive them using MoneyMiles or another receipt app. Paper receipts fade over time and can easily be lost.
- • Capture receipts within 24 hours
- • Ensure photos are clear and readable
- • Store in organized folders by category
📸 Instant Receipt Capture with Smart Scanning
Stop losing receipts. The MoneyMiles mobile app lets you snap photos immediately after purchase, with AI-powered extraction and automatic cloud backup.
- ✓OCR technology extracts date, amount, and merchant automatically
- ✓AI auto-categorizes expenses (fuel, insurance, equipment)
- ✓Cloud backup within seconds - never lose a receipt
- ✓Searchable digital archive with 5+ year storage
- ✓Export all receipts for HMRC compliance
2Categorize as You Go
Don't wait until tax time to organize expenses. Categorize each receipt immediately (fuel, insurance, equipment, etc.).
- • Use consistent categories
- • Add notes for unusual expenses
- • Tag expenses by date and project if needed
3Include All Required Information
Every receipt should clearly show:
- • Date of purchase
- • Supplier name and VAT number (if applicable)
- • Description of goods/services
- • Total amount paid (inc. VAT breakdown if VAT registered)
- • Payment method
4Back Up Everything
Store digital receipts in multiple locations:
- • Cloud storage (Google Drive, Dropbox)
- • Accounting software (MoneyMiles)
- • External hard drive backup
Digital Record Keeping Requirements
HMRC fully accepts digital records, and in fact encourages them as part of Making Tax Digital. Digital records are often more reliable than paper as they don't fade, tear, or get lost.
✅ HMRC-Acceptable Digital Records
- • Scanned or photographed receipts (clear and readable)
- • Email confirmations and invoices
- • Bank and credit card statements
- • Digital invoices (PDFs)
- • Cloud-stored documents
- • Accounting software records (like MoneyMiles)
📝 Minimum Information Required
Your digital records must show:
- 1. All income received (from all platforms)
- 2. All business expenses (with supporting evidence)
- 3. Business mileage logs (date, start/end location, miles, purpose)
- 4. VAT information (if VAT registered)
Common Expenses by Platform
Different delivery platforms have different requirements and typical expense patterns:
🚗 Uber Eats Drivers
Typical expenses include:
- • Vehicle costs (car/scooter insurance, fuel, maintenance)
- • PCO licence (if required in your area)
- • Thermal bag for food delivery
- • Phone mount and charger
- • Congestion charge (if applicable)
- • Vehicle hire (if renting)
🍕 Deliveroo Riders
Typical expenses include:
- • Bicycle or e-bike costs (purchase, repairs, insurance)
- • Deliveroo uniform and thermal bag
- • Lights and reflective gear
- • Phone accessories
- • Bike lock and security
- • Cycling insurance
🍔 Just Eat Couriers
Typical expenses include:
- • Vehicle/bike costs (varies by delivery method)
- • Insulated delivery bags
- • Just Eat uniform or branded clothing
- • Parking costs during pickups
- • Phone and data plan
- • Safety equipment (high-vis, helmet)
Expenses You CANNOT Claim
It's equally important to know what you cannot claim to avoid HMRC penalties:
Personal Expenses
Any expense that has a personal element cannot be claimed. This includes regular meals, personal shopping, entertainment, and personal travel.
Commuting Costs
Travel from home to your regular place of work (or first pickup) is commuting and not deductible. Only travel between job sites counts as business mileage.
Fines and Penalties
Parking tickets, speeding fines, PCNs, and any other penalties cannot be claimed as business expenses, even if incurred while working.
Non-Business Clothing
Regular clothes, even if you only wear them for work, are not deductible. Only branded uniforms or specialist protective gear can be claimed.
Entertainment & Client Hospitality
Meals, drinks, or entertainment for yourself or others are not deductible (except in very specific circumstances for sole traders entertaining overseas clients).
Calculating Business Use Percentage
When an expense has both business and personal use (like your phone), you can only claim the business proportion. Here's how to calculate it:
📱 Example: Mobile Phone
Your monthly phone bill is £40.
You estimate 60% of your usage is for work (taking orders, contacting customers, navigation).
Claimable expense: £40 × 60% = £24 per month
Annual saving: £24 × 12 = £288/year in deductions
Tips for determining business use percentage:
- Keep a log for one month showing business vs personal use
- Review your call/data logs to identify work-related activity
- Be reasonable and honest - HMRC may question unrealistic percentages
- Use the same percentage consistently throughout the year
- Update annually if your usage patterns change
Common business use percentages: Phone (50-70%), Vehicle (30-80%), Home office space (10-20%)
Expense Tracking with MoneyMiles
MoneyMiles makes expense tracking effortless with features designed specifically for UK delivery drivers:
Instant Receipt Capture
Snap photos of receipts in seconds. MoneyMiles automatically extracts the amount, date, and category using OCR technology.
Smart Categorization
Expenses are automatically categorized into HMRC-compliant categories, making tax time stress-free.
Cloud Storage
All receipts are stored securely in the cloud for 7+ years, meeting HMRC record-keeping requirements.
Real-Time Reports
See exactly how much you've spent by category, track tax savings, and generate reports for your accountant instantly.
Frequently Asked Questions
Automate Your Expense Tracking Today
Stop losing money on missed deductions. MoneyMiles tracks every penny automatically, saving you £1,800+ per year.