What can self-employed driving instructors claim on tax?

Every allowable expense comes off your taxable profit. For a self-employed ADI outside Scotland paying 20% basic rate income tax and 6% Class 4 National Insurance (the 2026-27 rate on profits between £12,570 and £50,270), each £1,000 of expenses you forget to claim costs you £260 in tax.

This guide covers what you can claim, how vehicle costs work for a dual-control car, the capital allowances on the car itself, and the mistakes that cost ADIs money every year.

The basic rule

You can deduct costs incurred wholly and exclusively for the business. Where something is used for both business and personal reasons, HMRC says "you can only claim allowable expenses for the business costs" (GOV.UK: expenses if you're self-employed). Your mobile phone is the usual example.

You don't send receipts with your return, but you need the evidence if HMRC asks. Keep receipts, bank statements and a mileage log. If you're in Making Tax Digital for Income Tax (qualifying income over £50,000 from 6 April 2026, over £30,000 from 6 April 2027), those records have to be digital.

Vehicle costs: your biggest deduction

For an ADI teaching in a dual-control car, there is only one way to claim it.

Actual costs

You claim the business share of what the car costs to run. GOV.UK lists vehicle insurance, repairs and servicing, fuel, parking, hire charges, vehicle tax and breakdown cover. For an instructor that means:

• Lease payments. Leasing counts as a hire charge. If the car emits more than 50g/km of CO2, 15% of the lease cost is disallowed.
• Hire purchase. You claim the HP interest as a cost. The car itself goes through capital allowances (below), not the monthly repayments.
• Fuel, in proportion to business miles
• Insurance, including your ADI tuition cover
• Servicing, repairs and MOT
• Tyres
• Breakdown cover
• Cleaning and valeting
• Parking at test centres and pupil pick-ups
• Dual control rental or fitting

You can't claim fines, travel between home and work, or personal journeys.

To split business from personal use, keep a mileage log. If you drive 24,000 miles in a year and 21,000 are for business, your business share is 87.5%, and you apply that to the running costs.

The flat mileage rate: not for a dual-control car

HMRC's simplified expenses let most sole traders claim a flat rate per mile instead of actual costs. For 2026-27 the rate is 55p a mile for the first 10,000 business miles (45p before 6 April 2026) and 25p after that.

It doesn't apply to your tuition car. GOV.UK says you can use the flat rate for cars "except those designed for commercial use, for example, black cabs, hackney carriages or dual control driving instructors' cars" (simplified expenses: vehicles). A dual-control car goes on actual costs plus capital allowances.

Two more rules from the same page matter if you have a second car you sometimes use for work. You can't use the flat rate on a vehicle you've already claimed capital allowances for, and once you use the flat rate on a vehicle you have to keep using it for as long as that vehicle is in the business.

Capital allowances on your car

If you buy the car outright or on hire purchase, you claim capital allowances rather than deducting the price in one go. Cars don't qualify for the Annual Investment Allowance. For cars bought from April 2021:

A new electric car can come off your profit in the year you buy it. A petrol car over 50g/km gets 6% a year: £1,200 in year one on a £20,000 car, and less each year after as the balance shrinks. With a lease, the payments come off as you make them, subject to the 15% restriction above.

If you also use the car privately, reduce the allowance by your personal-use percentage.

Other deductible expenses

Phone, software and equipment

• ADI software for booking, diary and accounts
• Mobile phone and data: the business share only
• Dashcam, SD cards, phone mount, charging cables

DVSA and professional costs

• ADI registration: the £300 fee you pay every 4 years to renew
• DBS checks, which you need every 4 years with your renewal
• Standards check preparation and CPD courses
• Trade body membership, such as the DIA or ADINJC, which GOV.UK allows when it relates to your business

Your initial ADI training is not allowable. GOV.UK says you can't claim training that helps you "start a new business". Training that keeps your existing skills up to date is fine.

Insurance

• ADI tuition car insurance (the business share, if you also drive the car privately)
• Public liability insurance
• Professional indemnity insurance

Marketing

• Website hosting and domain
• Google Ads and social media ads
• Car signs and magnetic roof signs
• Business cards and flyers
• Paid directory listings

Working from home

If you do admin, lesson planning or accounts at home for at least 25 hours a month, you can use HMRC's flat rate instead of working out a share of your household bills:

An hour a day of admin at home is about 30 hours a month, which puts you in the £10 band (£120 a year). Two hours a day takes you into the £18 band. The flat rate doesn't include phone or internet bills, so claim the business share of those separately.

The alternative is working out the actual business share of heating, electricity, Council Tax, rent or mortgage interest. It takes more working out, and you need a reasonable way to split the bills, such as the number of rooms or the hours you use them.

Other costs

• Accountancy fees for your business accounts. GOV.UK says the cost of preparing and submitting your Self Assessment return itself isn't claimable (legal and financial costs).
• Bank charges on your business account
• Stationery, lesson materials, workbooks
• Clothing: uniforms and protective clothing only. Everyday clothes are not allowable even if you wear them for work.

Mistakes that cost ADIs money

Not claiming at all. An instructor who tracks nothing pays tax on the whole of their lesson income. On £12,000 of real costs, that is £3,120 a year in tax they didn't need to pay.

Claiming the flat mileage rate on a dual-control car. It isn't available for tuition cars, so a return built on it overstates your expenses. Claim actual costs instead.

No mileage log. You need records to back up the business share of your fuel and running costs. Orbit lets you log business miles against each lesson in your diary, so every entry ties to a real lesson.

Missing small, regular costs. Car washes, parking, data top-ups, dashcam cards. A tenner a week is £520 a year, which is £135 in tax at 26%.

One bank account for everything. It makes expenses hard to separate and harder to explain if HMRC asks. A separate account for lesson income and business costs keeps the records clean.

Claiming your ADI qualification costs. Part 1, 2 and 3 training before you started trading isn't allowable.

Losing track of MTD deadlines. If you're in Making Tax Digital for Income Tax, quarterly updates are due by 7 August, 7 November, 7 February and 7 May. HMRC won't penalise a missed quarterly update for 2026-27, but points-based late submission penalties apply after that, and you can't file your tax return until the updates are in.

What proper tracking is worth

If your allowable costs come to £12,000-£18,000 a year, claiming them at 26% (20% income tax plus 6% Class 4) means £3,120-£4,680 a year less tax than claiming nothing.

To see what your own expenses do to your bill, run your figures through the Orbit tax estimator. Orbit (listed with HMRC as DrivePro) is built on HMRC's Making Tax Digital for Income Tax API and is completing HMRC's software recognition process; live submissions open once HMRC approves it. It does not provide personalised tax advice.