If you aim to be part of the strong community of Uber drivers in the UK, you need to have your calculations done about how much you can make as an Uber driver and what are the details of taxes for Uber drivers.
The Uber drivers must be well aware of the fact that Uber is considered a self-employed company and this makes you liable for paying payroll taxes. The income Uber drivers are making is not subject to Uber taxes unless they think of filing taxes with HMRC. This will allow Uber the deduction from taxation.
Sounds complicated much? The tax affairs are often complicated but you don’t need to worry as we have got you covered here in this comprehensive guide. You will everything you need to know about the eligibility to become an Uber driver, how much can you make by being an Uber driver, and what kind of tax details you will handle.
Criteria To Become An Uber Driver
There are certain conditions to be a part of any process or business. So is the case of being part of the Uber drivers’ community. It is wise to check the eligibility criteria to see if you meet the required standards before investing your energy further in the process. This includes the following:
- The individual must be of age 21 or over that to become an Uber driver.
- One should own a valid licence in the UK to work as an Uber driver.
- In case you own an EU or other foreign driving licence, the requirement is to exchange it with the driving licence of the UK.
- Uber offers help with the Ignition programme to get through the process even if you own a private car driving licence.
- It is required to have a car that was manufactured in the year 2008 or after that. Any car older than that is not workable as per Uber requirements.
Income of Uber Drivers Explained
By now you must be wondering about how much money you can make being an uber driver. Well, this purely depends on the amount of work you do. The more you work the more money you will get. In case you are occupied and willing to take minimum rides, even if it is one ride a month, you will be part of Uber books.
The good news is that there is no limit to how much work you can do. It totally depends on you to decide your working hour and how many rides you can allow yourself in a month. Here comes the need to discuss the hourly rate. According to the head of the public policy in Uber UK, there are three typical hourly rates. The details are listed below:
- You can make £15 per hour in case you have your own car.
- In case you have a car available but you are paying for that vehicle and deal with car finance, your rate becomes £9 per hour.
- This rate becomes even lower in case you drive a car that is hired for the purpose. The rate in such a case is £8 per hour.
By calculating these hourly rates you can have an idea that how much money you can make in your specific circumstances. And of course, you will deduct the expenses to reach the final figure of your income. Moreover, Uber’s cut is important to consider here. Uber’s cut is 25% of your income.
Our Uber Accountants are just the right people to handle your tax queries, get in the car and reach out to us today or call us on 02086868876 or email us today. We will love to answer your tax queries.
How Much Do I Pay? – Taxes For Uber Drivers?
You know that Uber drivers are considered to be self-employed and they are responsible for paying the taxes as well as the national insurance. There is a requirement of completing self-assessment tax returns every year as well. But don’t you worry as you don’t have to pay the tax on all your income.
This is applied only to the number of profits you are making. In simple words, you can make the deductions of your expenses before you calculate your profits and the tax you are bound to pay for it.
In the UK, Uber drivers are sole traders mostly. The tax rates are the regular ones to follow for the sole traders as well. just like other regularly employed individuals. According to HMRC, the tax rate for the year 2022-2023 is as follows.
The rates of national insurance are slightly different for sole traders. You have to pay as:
- The wage received from the company is £4.62 and £9.50 an hour.
- If your profits are between £9,501 and £50,000, you will follow 9 percent on profits and you come under class 4 national insurance. If it goes above £50,000, you will pay 2 percent.
The Bottom Line
The discussion of Taxes For Uber Drivers can finally be summed up as you have gathered the basic information about the tax details applied as an Uber driver. This is important to realise that as an Uber driver you are the one who is the major expense as a driver in this business. The expenses related to the car are also supposed to be deducted to get error-free figures about the expenses and the profits.
Ensure the process wholly and exclusively to bring success factor to your business growth. We hope these few minutes of reading will help to make smart decisions.
We offer free basic consultation for one hour, come and book right away to get your requirements settled with us. We ensure to provide the best services for handling your tax.
Disclaimer: The information about Taxes For Uber Drivers provided in this article is general in nature and does not intend to disregard any of the professional advice.