Self employed income calculation: Uber driver’s reasonable expenses

Would be interested in any experience or views on the problem of net profit calculation for HB claim.  Our client is an Uber driver and our council have disregarded 25% of his car expenses claiming this is the proportion of “personal use” of his car.  Client is arguing he uses his car for personal use only 10% of the time.  Anyone aware of precedent or regulations about this?

It will take some effort but it should be possible to verify this to a reasonable degree of accuracy by using trip data from the uber account and mileage readings from two consecutive MOTs.  The only issue would be dead miles (travelling from last drop off to next pick up). Uber claims to minimise dead miles compared with traditional minicab offices where drivers spend a lot of time shuttling back to a key location where people walk in to book a cab.  As a minimum the client’s dead miles should be at least as much as the sum of the distance between the drop off and next pick up location, but it will take some work to calculate that.

Also double check whether the LA has applied the 25% disregard ‘across the board’ of the various car related expenses. Some of these (fuel is the obvious one, also parking charges, cleaning charges) will obviously increase through personal use and so it is appropriate for these expenses to be disregarded - any dispute of how much should be disregarded along the lines set out by HB Anorak.

But other expenses (e.g. MOT; Tax; lease/hire-purchase payments) are set payments that do not increase through increased use of the vehicle. For a Uber driver the vehicle is a fundamental requirement for their work and these costs would be payable in full regardless of any personal use. So for those I’d be arguing that the expenses should be disregarded in full.

That said the last one of these I did the claimants accountant had reduced their claimed expenses for MOT and Road Tax also and only claimed the lease payments (which were very large and were the main subject of the dispute) in full. So there may be some kind of accountancy ‘principle’ in how these costs are dealt with.