A Reddit post on r/UKPersonalFinance recently captured a question that catches thousands of gig workers every year: “I’ve been doing Deliveroo on weekends for about 8 months, earning maybe £200-300 a month. Someone told me I need to do a ‘self assessment’ but I’m not self-employed, I’m just a rider. Do I actually need to tell HMRC?”
The comments were a mess of conflicting advice. One person said “you’re employed by Deliveroo, they handle your tax.” Another said “you’re self-employed, you need to file.” A third said “it’s under £1,000 so don’t worry about it.” All three were partially wrong.
The confusion is understandable. Gig platforms market themselves as flexible, “be your own boss” arrangements — but the tax implications of that flexibility aren’t spelled out anywhere in the app. Here’s the plain-English answer.
What Is Gig Economy Tax?
Gig economy tax is the Income Tax and National Insurance you owe on earnings from platform work — driving for Uber or Deliveroo, delivering for Just Eat, or selling on Etsy and Vinted. For tax purposes, gig workers are classified as self-employed, regardless of whether they have “worker” rights like minimum wage or holiday pay. If you earn more than £1,000 from gig work in a tax year, you must register for Self Assessment and file a tax return; below £1,000, the trading allowance covers it.
Are Deliveroo and Uber Riders Self-Employed or Employed?
For tax purposes, you are self-employed. This is the case for riders and drivers working for Deliveroo, Uber, Just Eat, Stuart, Amazon Flex, and virtually every other gig platform in the UK.
This means:
- You are responsible for declaring your own income to HMRC
- Tax is not deducted from your earnings before you’re paid (no PAYE)
- You must register for Self Assessment if your income exceeds the threshold
- You pay your own Income Tax and National Insurance
This is true even though some gig workers have won “worker” status in employment tribunals and the Supreme Court (notably Uber drivers in the 2021 Uber BV v Aslam ruling). “Worker” status gives you certain employment rights — minimum wage, holiday pay, pension enrolment — but it does not change your tax classification. You’re still self-employed for tax purposes, still file a Self Assessment, and still pay your own tax and NI.
The distinction matters because people assume “worker rights” means “employed for tax.” It doesn’t. The two systems are separate: employment law defines your rights, tax law defines how you’re taxed. For gig workers, the answer is consistent across both major platforms: self-employed for tax, regardless of worker status.
According to HMRC’s guidance on working for yourself, you’re self-employed if you’re in business on your own account — even if that business is delivering food on a bike a few evenings a week.
Do You Need to File a Tax Return for Gig Economy Work?
This depends on how much you earn. The threshold is £1,000 of gross income per tax year (6 April to 5 April), thanks to the trading allowance.
If you earn £1,000 or less from gig work
You generally don’t need to file a Self Assessment or tell HMRC about this income. The £1,000 trading allowance covers it — it’s tax-free and you don’t need to declare it. This is true even if you also have a PAYE job.
One caveat: if you already file a Self Assessment for other reasons (e.g., you’re self-employed in another business, or you earn over £100,000 total), you should still declare the gig income on your return — but you can then deduct the £1,000 allowance so no tax is due on it.
If you earn more than £1,000 from gig work
You must register for Self Assessment and file a tax return. This is the case even if:
- You have a full-time PAYE job and only do gig work on weekends
- You only earn slightly over £1,000 (e.g., £1,200)
- You don’t think of it as a “business”
The £1,000 threshold is on gross income (total earnings before any expenses), not profit. If Deliveroo paid you £1,500 over the tax year, your gross income is £1,500 — you’re over the threshold and must file, even if after fuel and bike repairs your actual profit was only £600.
For the step-by-step process of registering, see our first-year self-employed checklist. If you didn’t know you needed to register and the deadline has passed, see our guide on what to do if you didn’t know you needed to register — the penalty is often £0 for first-timers.
Side Hustle Tax: When Do You Need to Declare It?
The same £1,000 trading allowance applies to any side hustle — not just gig platforms. Whether you’re selling on Etsy, flipping items on Vinted, doing freelance graphic design, or driving for Uber, the rule is the same:
- Under £1,000 gross: No need to declare. The trading allowance covers it.
- Over £1,000 gross: You must register for Self Assessment and file a tax return.
The key question is whether your activity counts as a trade for tax purposes. HMRC uses “badges of trade” to decide — indicators like whether you buy items to resell for profit, how regularly you do it, and whether you’re trying to make a profit. Selling a few old clothes on Vinted is probably not a trade. Buying stock to resell regularly is.
The £1,000 threshold covers all your side hustle income combined. If you earn £600 from wedding photography and £500 from social media posts, your total is £1,100 — you’re over the threshold and must register, even though neither activity hits £1,000 on its own.
Key deadlines for 2025/26
If you’re new to Self Assessment for the 2025/26 tax year, the deadlines are:
- Register by 5 October 2026 — new entrants must register for Self Assessment by the 5 October after the tax year ends.
- File and pay by 31 January 2027 — your online tax return and any tax due must be submitted and paid by this date.
Not sure if you need to register? HMRC’s Help for Hustles campaign includes a free online tool — “Where is your additional income from?” — that takes a few minutes and tells you whether you need to file and how to register. According to HMRC research, one in ten UK adults are operating in the hidden economy, with most unaware they should be registered for tax.
For the full breakdown of the £1,000 allowance and when to use it vs claiming actual expenses, see our trading allowance vs expenses guide.
How Much Tax Do You Pay on Gig Economy Income?
If you’re over the £1,000 threshold, your tax is calculated on your profit (income minus allowable expenses, or income minus the £1,000 allowance if you choose that route). The tax you pay depends on your total income from all sources — including any PAYE job.
The UK tax bands for 2025/26 are:
| Band | Income range (2025/26) | Tax rate |
|---|---|---|
| Personal Allowance | £0 – £12,570 | 0% |
| Basic rate | £12,571 – £50,270 | 20% |
| Higher rate | £50,271 – £125,140 | 40% |
| Additional rate | Over £125,140 | 45% |
If you have a PAYE job earning £35,000 and you make £5,000 profit from Deliveroo, your gig income sits in the basic rate band — you pay 20% on it, which is £1,000. But if your PAYE salary is £55,000, your gig income is in the higher rate band — you pay 40%, which is £2,000.
Your Personal Allowance (£12,570) is used against your PAYE income first. Gig income is taxed on top. For a full breakdown of how the allowance and bands work, see our Personal Tax Allowance 2026 guide.
You’ll also pay Class 4 National Insurance on your profit if it exceeds £12,570 (6% in 2025/26, dropping to 5% from April 2025 per the Spring 2024 Budget changes). Class 2 NIC has been abolished.
What Expenses Can Gig Workers Claim?
This is where gig workers can significantly reduce their tax bill. The expenses you can claim depend on what you do:
For delivery riders (Deliveroo, Just Eat, Stuart)
- Bike repairs and maintenance — tyres, chains, brake pads, servicing
- Bike insurance — if you have specific delivery/rider insurance
- Phone and data — for receiving orders and navigation (apportion if used personally too)
- Safety equipment — helmet, lights, high-vis jacket
- Waterproof clothing — if bought specifically for riding
- Bike itself — through capital allowances if you bought it for the job
For drivers (Uber, Bolt, Amazon Flex)
- Fuel costs — petrol, diesel, or electricity for charging
- Vehicle costs — servicing, MOT, insurance (must be hire-and-reward/ride-hail insurance), road tax
- Mileage — alternatively, use the simplified mileage rate (45p/mile for the first 10,000 miles, 25p thereafter) instead of claiming actual costs
- Phone and data — for the app and navigation
- Car cleaning — if you need to keep the car presentable for passengers
The choice between actual costs and the simplified mileage rate is one of the biggest tax decisions for Uber drivers. For the full breakdown of which method saves you more, see our car expenses for sole traders guide.
Don’t go deep here — the hub links out. The detail is in the spoke.
The either/or rule
You can either claim the £1,000 trading allowance or your actual expenses — never both. If your expenses are under £1,000, the allowance is better (no receipts needed). If they’re over £1,000, claim actual expenses (you’ll save more, but you need receipts). For most full-time gig workers, actual expenses win because fuel/bike costs add up. For casual weekend riders, the allowance is usually simpler and better. Use our trading allowance vs expenses calculator to see which method saves you more.
What Records Should Gig Workers Keep?
If you’re over the £1,000 threshold and filing a Self Assessment, you need to keep records. According to HMRC’s self-employed record-keeping guidance, you must keep records for at least 5 years after the 31 January submission deadline.
For gig workers specifically, the key records are:
- Platform earnings statements — Uber, Deliveroo, and Just Eat all provide weekly or monthly earnings summaries. Download and save these.
- Bank statements — showing the payments from the platform to your account
- Expense receipts — fuel, bike repairs, insurance, equipment
- Mileage logs — if you’re using the simplified mileage rate, you need a record of business miles driven
- A record of hours worked — not strictly required for tax, but useful if your employment status is ever questioned
The easiest approach is to use a bookkeeping app that connects to your bank and lets you photograph receipts. Many are free for sole traders. From April 2026, if your qualifying income is over £50,000, you’ll need to use MTD-compatible software for digital record-keeping — see our Making Tax Digital guide for what that means.
MTD for Gig Workers: What Changes From April 2026
Making Tax Digital for Income Tax applies to gig workers in the same way it applies to any sole trader. If your qualifying income — your gross gig earnings before expenses — exceeds the threshold, you must use MTD-compatible software to keep digital records and send quarterly updates to HMRC.
Does MTD apply to you?
| Phase | Start date | Qualifying income threshold |
|---|---|---|
| Phase 1 | 6 April 2026 | Over £50,000 |
| Phase 2 | 6 April 2027 | Over £30,000 |
| Phase 3 | 6 April 2028 | Over £20,000 |
Your qualifying income is your gross platform earnings — the total Uber, Deliveroo or Just Eat paid you before any expenses. Fuel, bike repairs and insurance are expenses you deduct separately; they do not reduce your qualifying income for the threshold test.
If you drive for Uber and also deliver for Deliveroo, your income from both platforms is combined — it is one trade (gig work), not two. See our MTD with multiple trades guide for when separate trades apply.
What you need to do
- Choose MTD-compatible software — you need software that can submit quarterly updates to HMRC. For gig workers, apps with mileage tracking and receipt capture are best. Coconut is designed for sole traders and includes mileage tracking; FreeAgent is free with certain business bank accounts. See our cheapest MTD software guide for all options.
- Keep digital records — photograph fuel and bike repair receipts in your app. Download platform earnings statements. Track your mileage in the app if you use the simplified rate.
- Send quarterly updates — your software totals your digital records and sends a summary to HMRC every 3 months. Deadlines are 7 August, 7 November, 7 February and 7 May. No tax is due at the quarterly stage.
- Submit your final declaration by 31 January — this replaces your annual Self Assessment return. Your tax is still due by 31 January as normal.
No penalties for late quarterly updates in 2026/27
There are no penalty points for missing a quarterly update deadline in the 2026 to 2027 tax year. This is a transitional grace period. However, you still need to submit your quarterly updates before you can submit your final declaration, and penalties for late final declarations and late payment still apply. See our MTD penalties guide for the full rules.
Where to go next
- For the full MTD overview, see our Making Tax Digital guide
- To check your threshold, see MTD qualifying income thresholds or use our MTD qualifying income calculator
- For step-by-step registration, see how to register for MTD
- For the profession hub covering tradespeople, online sellers and Airbnb hosts, see MTD by profession
Digital Platform Reporting: HMRC Now Gets Your Data Automatically
This is the biggest change to gig economy tax in years, and most riders don’t know about it.
From January 2024, digital platforms operating in the UK must report sellers’ income to HMRC automatically. This follows the OECD’s model rules for digital platform reporting, which the UK has implemented. According to HMRC’s guidance on digital platform reporting, the platforms affected include:
- Ride-hailing: Uber, Bolt, Ola
- Food delivery: Deliveroo, Just Eat, Uber Eats, Stuart
- Marketplaces: eBay, Vinted, Etsy, Amazon Marketplace
- Property: Airbnb, Booking.com
- Freelance platforms: Fiverr, Upwork
What this means in practice: HMRC now receives a report of how much you earned from each platform during the tax year. They can cross-reference this against your Self Assessment return. If you earned £3,000 from Deliveroo but didn’t declare it, HMRC is increasingly likely to know.
The reporting threshold is generally £1,000 of annual sales on a platform — the same as the trading allowance. Platforms report all sellers who exceed this. If you earned under £1,000 on a given platform, that platform may not report you — but if you use multiple platforms, your total income could still exceed the threshold.
For what happens if HMRC finds undeclared income, see our guide on what triggers an HMRC investigation. The digital platform reporting rules are now one of the most common triggers.
What Happens If You Don’t Declare Gig Economy Income?
If you’ve earned over £1,000 from gig work and haven’t declared it, the best thing you can do is come forward voluntarily before HMRC contacts you. HMRC treats voluntary disclosure more leniently than discovery.
The options:
- File your overdue Self Assessment returns now — you’ll pay the tax owed plus interest, but penalties are typically lower if you come forward voluntarily
- Use HMRC’s disclosure facilities — if the undeclared income is significant, you can make a formal disclosure
- Wait for HMRC to find you — with digital platform reporting, this is increasingly likely, and penalties are higher when HMRC discovers the omission rather than you declaring it
If you simply didn’t know you needed to register, HMRC often waives the penalty for first-timers. See our guide on what to do if you didn’t know you needed to register for Self Assessment — the penalty is often £0.
The Bottom Line
- You’re self-employed for tax purposes — regardless of platform, regardless of “worker” rights. You file a Self Assessment and pay your own tax and NI.
- The £1,000 trading allowance is your threshold — earn under £1,000 gross from gig work and you generally don’t need to file. Over £1,000, you must register and file.
- Your tax depends on your total income — gig income is taxed on top of any PAYE salary, at your marginal rate (20%, 40%, or 45%).
- Claim expenses or the allowance, not both — if your costs (fuel, bike repairs, insurance) are over £1,000, claim actual expenses. If under, claim the allowance.
- Keep platform earnings statements — Uber, Deliveroo, and Just Eat all provide summaries. Download them and keep for 5 years.
- HMRC now gets your data from platforms directly — from January 2024, digital platforms must report your income to HMRC. Undeclared gig income is increasingly likely to be caught.
- Come forward voluntarily if you haven’t declared — penalties are lower than if HMRC finds you first. If you didn’t know you needed to register, the penalty is often £0.
- MTD applies from April 2026 if your gross gig income is over £50,000 — you’ll need MTD-compatible software, digital records and quarterly updates. No penalties for late quarterly updates in the first year.
For the full comparison of self-employed business structures — sole trader, limited company, umbrella, and CIS — see our self-employed business structure hub.
For the full breakdown of the £1,000 allowance vs actual expenses, see our trading allowance guide. For car expenses as an Uber driver (mileage vs actual costs), see our car expenses guide. For the registration process, see our first-year self-employed checklist. For what triggers HMRC investigations — including digital platform reporting — see our HMRC investigation guide. For the broader picture of how employment status works and what it means for your tax, see our employment status and tax hub.