How to pay tax as a Hermes courier
If you’re a Hermes self-employed courier, you may already know that you have to pay tax on any income you earn. You do this by submitting a tax return to HMRC, which is a legal requirement if you’re self-employed. This is often called a Self-Assessment tax return.
You complete one every tax year, and deduct tax yourself from your courier earnings to have enough to pay your tax bill to HMRC.
I’m a Hermes self-employed courier, please help!
You might have a basic understanding of why you do a tax return and what this involves, but, what you might not know all the things you need to file your tax return and how to calculate the amount of tax you need to pay.
Hermes couriers are classified as self-employed. There’s a lot of debate still going on in Government about whether courier drivers are self-employed, or employees of a company making them entitled to workers’ rights. Regardless of the debate, it helps for you to be up to date when it comes to your tax return.
HMRC requires you to complete a Self Assessment tax return if you are:
- A sole trader
- Receiving income that is not taxed at source
How much tax do I need to pay?
What you pay to HMRC is based on your income minus the expenses of being a Hermes courier. You can read more on how to complete your self-assessment tax return in this Earnr article.
The tax bands for Uber drivers work in the same was as any other occupation:
- Tax allowance: 0% of earnings (You earned between £0 - £12,570)
- Basic rate: 20% of earnings (You earned between £12,571- £50,270)
- Higher rate: 40% of earnings (You earned between £50,271 - £150,000)
- Additional rate: 45% of earnings over £150,000
What can I expense as an Hermes courier?
One of the perks of being a Hermes self-employed courier is that you’re able to claim back some of your tax on business expenses. Any expenses that you have incurred which are ‘wholly and exclusively’ for your work are tax deductible. This includes:
- Fuel costs
- The cost of repairs, servicing and running of your vehicle
- The costs of your annual road tax and your MOT test
- The cost of cleaning your own vehicle
- Interest on any bank or personal loans taken out to purchase your vehicle
- Your license and any other registration fees
- Car insurance
- Breakdown recovery membership fees
- Phone usage for business use
- Parking & toll charges
Be aware that if you use the same vehicle for your own personal use then you’ll need to factor this in when any expenses are claimed. If you work out that you use your vehicle 40% of the time for personal use, then you would need to reduce any relevant vehicle running expenses by 40%.
How can Earnr Help?
Earnr allows you to track your ingoings and outgoings over the course of the year, and automate your tax return. You mark each payment and each expense as you go so that by the time you get to doing your tax return, we’ll have everything we need to do the process for you.
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