Budgeting for a tax bill you have not had yet
Set aside a percentage of every payment as it arrives, into an account you do not spend from. For most full-time drivers claiming mileage, somewhere between 20% and 30% of what the platforms pay is enough, and the first year needs more because of payments on account.
Correct for the 2026/27 tax year. Last checked 12/09/2026.
A PAYE employee never sees the tax. A self-employed driver sees all of it, spends some of it, and meets the bill twelve months later. That gap is the whole problem, and the fix is mechanical rather than clever.
Work out your own percentage
The right number depends on your mileage, because mileage is what turns turnover into profit.
| Driver | Paid by platforms | Business miles | Rough tax and Class 4 | As a share of what they were paid |
|---|---|---|---|---|
| Part-time, evenings | £9,000.00 | 5,000 | £0.00 | 0% |
| Steady, four days a week | £18,000.00 | 11,000 | £1,050.00 | 6% |
| Full-time | £26,000.00 | 16,000 | £1,880.00 | 7% |
| Full-time, low mileage private hire | £30,000.00 | 9,000 | £4,320.00 | 14% |
Those are illustrative rather than typical, and they assume no other income and the mileage method. The pattern is what to take from them: for a driver claiming mileage, the tax is a much smaller share of turnover than the 20% to 30% rule of thumb suggests. That rule is safe rather than accurate, and being over-provisioned in January is a nice problem.
The first year is different
If your bill passes £1,000, the first January includes payments on account and is around 150% of the year's tax. Budget for that from the start rather than discovering it in the last week of January.
How to actually do it
- Open a second account. A savings account at the same bank is fine. The only requirement is that it is not the account your card is attached to.
- Pick a percentage and set it aside the day each platform pays you, not at the end of the month.
- Check it against a real estimate every couple of months and adjust the percentage rather than the habit.
- Leave it alone. Money moved out for tax is not spare money that happens to be somewhere else.
Getting a real number instead of a rule of thumb
JoltMile's estimated tax figure uses your own turnover, your own mileage and the current rates rather than a percentage. It is an estimate and it says so, but it is a considerably better basis for a savings target than a number somebody picked because it sounded prudent.
Sources
Common questions
- Is 30% of my earnings enough to cover the tax?
- For most full-time drivers claiming mileage, yes, and it is usually more than enough. The percentage that matters is a percentage of profit, not of turnover, and mileage takes a large slice out before tax is calculated.
- Should I use a separate bank account?
- It is the single most effective thing you can do. Money in the same account as everything else gets spent, and no amount of discipline beats not being able to see it.
- What if I have a PAYE job as well?
- Your personal allowance is probably used up at the day job, so the delivery profit is taxed from the first pound. Budget a higher percentage, and read the guide on having both.
- When exactly do I need the money?
- 31 January for the balancing payment, and 31 July for a second payment on account if you have them. Both dates are fixed and neither moves for a weekend in your favour.
- What if I have already spent it?
- Tell HMRC before the deadline and ask about Time to Pay. Doing that early is treated very differently from missing a payment and explaining afterwards.
About the author
Issac Davies, Founder of JoltMile
Issac Davies drives for gig apps in the UK and built JoltMile to show drivers what a shift actually pays once fuel, insurance and tax come off. Every guide here is checked against HMRC and gov.uk guidance, and is information rather than tax advice.
Track this automatically
Estimated tax · Take-home pay: the JoltMile app works this out from your own shifts. Free for 12 shifts a month.
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