If you earn through delivery or driving apps, you'll come across two ways to reduce the income you're taxed on: the £1,000 trading allowance and allowable expenses. GOV.UK says you can use one or the other, not both. Here's how each works, using GOV.UK's own rules.
The trading allowance
GOV.UK describes the trading allowance as "a tax exemption of up to £1,000 a year for individuals with trading income". In short:
- If your gross trading income is £1,000 or less, you generally don't need to tell HMRC, unless you can't use the allowance or you have to register for Self Assessment for another reason.
- If it's more than £1,000, you must register for Self Assessment by 5 October after the end of the tax year.
- Once you're filing, you can deduct the allowance from your gross trading income instead of claiming expenses. GOV.UK says you can't deduct other expenses or allowances if you claim it.
- It doesn't apply to trading income from a partnership, and there are other exclusions. See tax-free allowances on property and trading income.
Allowable expenses
GOV.UK says you can deduct allowable expenses from your turnover to work out your taxable profit. For vehicles and travel, its car, van and travel expenses page lists things like:
- insurance, repairs and servicing
- fuel and parking
- hire charges and vehicle tax
- breakdown cover
It also lists what you can't claim:
- non-business driving or travel
- fines or penalty charges
- travel between home and work
If something is used partly for personal reasons, such as your phone, GOV.UK says you can only claim the business part.
Flat mileage rates (simplified expenses)
Instead of adding up the actual cost of running a car, van or motorbike, you may be able to use GOV.UK's flat rate per business mile:
| Vehicle | 2026–27 tax year | Before 6 April 2026 |
|---|---|---|
| Cars and goods vehicles, first 10,000 miles | 55p | 45p |
| Cars and goods vehicles, after 10,000 miles | 25p | 25p |
| Motorcycles | 24p | 24p |
Two points:
- The return due by 31 January 2027 is for 2025–26 (6 April 2025 to 5 April 2026), so that year's miles fall in the "before 6 April 2026" column.
- GOV.UK says: "Once you use the flat rates for a vehicle, you must continue to do so as long as you use that vehicle for your business."
For whether you're eligible, see simplified expenses for vehicles.
Worked example (round numbers, 2025–26)
Jo drives a car for a delivery app. Jo's records for the year show £6,000 of trading income and 4,000 business miles.
- Trading allowance: £6,000 − £1,000 = £5,000.
- Flat mileage rate instead: 4,000 miles × 45p = £1,800, so £6,000 − £1,800 = £4,200, before any other allowable expenses.
These are just the two calculations, using GOV.UK's rates. Which method applies, and whether other expenses count, is Jo's decision to make with HMRC's guidance or an accountant. Whichever way, Jo needs a correct income total and a mileage log.
What you need either way
- A correct income total for the tax year (6 April to 5 April), from your app statements, not from bank deposits.
- Records of business miles or costs, if you claim expenses. GOV.UK expects records you can back up.
- The same method for each vehicle once you've chosen flat rates for it.
FAQ
Is the £1,000 per app? GOV.UK describes it as up to £1,000 a year for an individual's trading income. If you're unsure how it applies to you, check with HMRC or an accountant.
Can I claim the trading allowance one year and expenses the next? GOV.UK describes the allowance as "up to £1,000 each tax year", but its guidance doesn't spell out switching between years. Check with HMRC or an accountant for your situation. Note the flat mileage rule above, which applies per vehicle.
Does the 55p rate apply to my 2025–26 return? No. GOV.UK shows 55p for the 2026–27 tax year and 45p before 6 April 2026.
Getting the income figure right
Whichever method you use, it starts from your earnings. gigsplit reads your app statements (PDFs or screenshots) and checks each one adds up. It flags missing or duplicate weeks, and gives you tax-year totals by app in a spreadsheet. Your first 4 statements are free, with no sign-up. It doesn't choose a method or tell you what to report.
This isn't tax advice. Check GOV.UK's guidance on the trading allowance or an accountant for your situation, and check the figures before you submit anything.