Allowable expenses for driving instructors: what you can claim

Most guides to self-employed expenses are written for people who work at a desk. A driving instructor’s biggest cost is a car that HMRC treats differently from every other car on the road, and the generic advice about claiming 55p a mile is, for the car you teach in, wrong.

Here is the version written for the job, with the figures read off gov.uk and linked at the bottom.

Start with the rule everything else hangs off

You can only claim the business share of a cost. HMRC’s own example is a phone bill: £200 of calls, £70 of them business, so £70 is what goes in. That principle decides most of the questions below.

The nine categories HMRC names are office costs, travel, clothing, staff, things you buy to sell on, financial costs, business premises, advertising and marketing, and training courses. Everything an instructor spends money on sits somewhere in that list; the work is apportioning it honestly and keeping the receipt.

The car: why the flat rate is not yours

Simplified expenses let most sole traders skip actual running costs and claim a flat rate per business mile. From 6 April 2026 that is 55p for the first 10,000 miles and 25p after (45p and 25p before that date), with motorcycles at 24p.

Driving instructors are carved out by name. The gov.uk page allows simplified expenses for “cars (except those designed for commercial use, for example, black cabs, hackney carriages or dual control driving instructors’ cars)”.

So for the car with dual controls fitted, you claim actual costs, apportioned to business use:

• Fuel or charging
• Insurance, including the instruction cover the ordinary policy will not give you
• Servicing, MOT, repairs, tyres
• Road tax, breakdown cover, valeting
• Dual-control fitting and removal
• Lease or hire payments, if you lease rather than own

Add them up, work out the business percentage, claim that share. The private-use share stays out.

If you also run a car without dual controls — for admin trips, visiting test centres, collecting parts — that one is not carved out, and the flat rate is available for it. Track the two separately from day one; untangling them a year in is painful.

Once you use the flat rate for a vehicle you must keep using it for as long as that vehicle is in the business, and you cannot use simplified expenses at all “for a vehicle you’ve already claimed capital allowances for”. The choice is effectively one-way.

Capital allowances on the car itself

Buying the car goes through capital allowances.

Cars do not qualify for the annual investment allowance. The AIA is £1 million and covers most plant and machinery, but gov.uk excludes “business cars” explicitly. So the car goes into writing down allowances instead, at a rate set by when you bought it and its CO2 emissions.

For a car bought from April 2021:

The car	What you claim
New and unused, 0g/km CO2 (or electric)	100% first-year allowance
Second-hand electric	Main rate allowances
New or second-hand, 50g/km CO2 or less	Main rate allowances
New or second-hand, over 50g/km CO2	Special rate allowances

The main rate is 14% of the car’s value each year, or 18% before April 2026. The special rate is 6%. And the same apportionment rule applies: “if you’re a sole trader or partnership and you also use your car outside your business, work out what you can claim based on the amount of business use”.

Motorcycles, vans and lorries are not cars for this purpose, so they do qualify for the annual investment allowance. If you teach on a bike, that is a materially better position than the car side.

The electric line is the one worth doing arithmetic on. A new zero-emission car bought for the business gets a 100% first-year allowance — the whole business-use value deducted in year one, rather than 14% a year for a decade. Against that, sit the cost of fitting dual controls to it and what learners think about teaching in an automatic.

ADI fees, tests and training

Registration and testing are business costs, and the current DVSA figures are:

Item	Fee
ADI part 1 test	£81
ADI part 2 test	£111
ADI part 3 test	£111
First ADI badge	£300
Renewal or re-registration	£300
Trainee driving instructor licence	£140

Registration runs for four years, so the £300 is a four-yearly cost rather than an annual one. You pay the test fee again in full if you do not pass.

Training courses count where they are “related to your business, for example refresher courses”. The line HMRC draws is between keeping current in the trade you already work in and acquiring a new trade — continuing professional development, fleet or Pass Plus training and standards-check preparation sit on the allowable side. If you are still qualifying, talk to an accountant before assuming the training that got you there is deductible against a business that did not yet exist.

Everything else worth claiming

The costs instructors most often leave on the table:

• Franchise fees. If you pay a school weekly for a car and a supply of learners, that is a business cost. It also counts towards your turnover for Making Tax Digital, because turnover is measured before expenses — see our guide to MTD for driving instructors.
• Software and subscriptions. Your diary, your accounting tool, your phone plan’s business share. Passdesk is £19 a month and, like any of them, is an allowable cost.
• Card processing fees. The percentage the payment processor takes is a financial cost, not lost revenue. Claim it — your gross income is what the learner paid, and the fee is an expense against it. Both figures are on your processor’s statement; Passdesk’s payments records the gross.
• Working from home. If you work at least 25 hours a month from home there is a flat rate: £10 a month for 25 to 50 hours, £18 for 51 to 100, £26 for 101 and more. Modest, but it costs nothing to claim and needs no bill-splitting.
• Advertising. Website, directory listings, printed cards, vehicle livery, local sponsorship.
• Professional fees. Accountant, bookkeeper, trade-body membership, professional indemnity and public liability cover.
• Teaching materials. Highway Code copies, theory-test resources, dashboard mirrors, L-plates, first-aid kit.
• Bank charges and interest on a business account or a loan taken to fund the business.

What you cannot claim

• The private-use share of anything. That includes the car, the phone, the broadband.
• Ordinary clothing. Uniform and protective gear are allowable; a coat you wear to work is not, however much you only wear it to work.
• Fines. A parking ticket picked up on a lesson is not deductible.
• Entertaining clients. Never allowable, even when it is plainly a business expense in every other sense.
• The commute from home to a fixed place of work. For most instructors the first pick-up is genuine business travel rather than a commute, but if you drive to the same depot every morning, that leg is a commute.

Keep the record as you go

The change worth making is to categorise every cost, with the receipt attached, when it happens, because from April 2026 those records have to be digital and quarterly for anyone inside Making Tax Digital.

That is what the expense ledger and the tax export in Passdesk are for: costs categorised as you log them, receipts stored against the row, and a period total you can hand to whoever files for you.

This is a plain-English summary of published HMRC and DVSA guidance, not tax advice. Apportionment, capital allowances and the training-cost boundary all turn on your own circumstances — the primary pages are listed below, and an accountant is worth their fee here.