I've Received a Letter from HMRC About My Uber Income. What Should I Do?

Do not ignore this letter

If you have received a letter from HMRC asking you to review your income from Uber, Bolt, FreeNow, or another platform, act on it.

Ignoring it will not make it go away. HMRC holds earnings data directly from the platforms. They sent you this letter because that data does not match what you declared, or because you did not declare anything at all.

The longer you wait, the more interest builds up on any tax owed. And if HMRC moves from a letter to a formal investigation, the penalties increase significantly.

Why HMRC is writing to private hire drivers

Since January 2024, digital platforms including Uber, Bolt, FreeNow, and Gett have been legally required to report driver earnings directly to HMRC every year. HMRC then compares those figures against the tax returns submitted by drivers.

Where there is a mismatch, or where no return was filed at all, HMRC sends a nudge letter asking the driver to review their position.

There is no single reason drivers receive these letters. The most common situations are:

• Complete non-declaration: the driver never registered for Self Assessment and declared nothing
• Missed tax years: the driver is registered but did not file a return for one or more years
• Gross versus net income error: the driver declared the amount paid into their bank account (after the platform's deduction) rather than the full fare paid by the passenger
• Understatement: the driver filed a return but the income figure is lower than what the platform reported to HMRC

Each situation is different. The steps you need to take, and the potential amount owed, will depend on which of these applies to you.

The gross versus net income issue

The most widely discussed cause of these letters is the gross versus net income error. It is worth understanding clearly, though it does not apply in the same way to all drivers. Our income declaration guide explains what you should be declaring and how this differs between platforms.

Outside London

For most drivers outside London, Uber acts as an agent connecting you with passengers. The full fare belongs to you, and Uber deducts its service fee before paying out.

For example: a passenger pays £20. Uber deducts a 25% service fee (£5) and pays you £15. Your taxable income for that journey is £20, not £15. The £5 fee is a business expense you claim separately.

If you declared £15 as your income, HMRC sees a £5 shortfall on that single journey. Multiply that across every journey and the difference can be substantial.

London PCO drivers

In London, Uber operates as the principal supplier of the journey, not as your agent. This means the passenger's fare belongs to Uber, and Uber pays you a separate amount for completing the trip. The gross versus net commission issue described above does not apply in the same way.

If you are a London PCO driver and you have received a nudge letter, the cause is likely to be something else, such as a missed tax year or an understatement of what Uber reported paying you.

What to do if you think there is a shortfall

If, after checking your records, you believe you have underdeclared income for any tax year, the right course of action is a voluntary disclosure to HMRC.

Disclosing voluntarily, before HMRC opens a formal investigation, reduces the penalties you face. It also means you control the process rather than reacting to HMRC's own assessment of what you owe.

1. 1
   Download your earnings summaries

   Get the annual income figure from each platform for every tax year in question. Uber, Bolt, and FreeNow all provide these in the driver portal. Make sure you are looking at the correct figure for your situation, not just the amount paid into your bank account.

2. 2
   Compare to what you declared

   Look at the Self Assessment returns you submitted for those years. Compare the income figure on each return against the earnings figure from the platform. If you used a tax return service or accountant, ask them for copies of what was filed.

3. 3
   Work out the additional tax owed

   If there is a shortfall, calculate the additional Income Tax and National Insurance due on the underdeclared amount. You will also owe interest, which runs from the date the tax was originally due. HMRC currently charges interest at around 7.25% per year.

4. 4
   Make a voluntary disclosure via HMRC's online service

   HMRC runs a Digital Disclosure Service (DDS), which is the standard online route for correcting past tax errors voluntarily. You notify HMRC that you intend to make a disclosure, receive a reference number, and then have 90 days to submit your full figures and pay what you owe. The service is available at gov.uk/guidance/make-a-disclosure.

5. 5
   Pay what you owe within the 90-day window

   Once your disclosure is submitted and HMRC accepts it, you pay the tax and interest due, plus any penalty. A penalty is not automatic: for a first careless error disclosed promptly, HMRC may reduce it significantly or to zero. If you cannot pay in full straight away, HMRC may agree a payment plan, where you pay in instalments over an agreed period. You need to contact HMRC to arrange this before the 90-day window closes.

What if you declared the correct amount?

If you have checked your records and you are confident your return was accurate, you still need to respond to the letter.

Do not ignore it on the basis that you have nothing to correct. Contact HMRC using the details on the letter and confirm in writing that you have reviewed your records and that your return was accurate. Keep a copy of that correspondence.

HMRC works from the data the platforms send, which can occasionally contain errors or be mismatched in ways that do not reflect actual underpayment. A mismatch on HMRC's side does not automatically mean you owe anything, but you need to tell them that clearly and in writing.

What happens if you wait

The penalty for underdeclared income depends on two things: whether you disclose voluntarily, and how HMRC classifies your behaviour.

HMRC places behaviour into three categories:

• Careless: you made an honest mistake and did not intend to underpay
• Deliberate: you knew the income should have been declared and chose not to
• Deliberate with concealment: you actively hid the income from HMRC

The category affects both the penalty rate and how many years back HMRC can investigate. Disclosing before HMRC opens a formal investigation always results in a lower penalty than waiting.

There is also a distinction between disclosing without being prompted (you come forward before receiving any letter) and disclosing after receiving a nudge letter (HMRC has already made contact). Both are treated as voluntary, but an unprompted disclosure attracts a lower penalty rate.

In all cases, interest runs separately from the date the tax was originally due. The longer the unpaid period, the larger the interest charge on top of the penalty.

Some cases are more complex than others

A straightforward case might look like this: you received a nudge letter, you have identified a gross versus net income error across one or two tax years, and you have your platform earnings summaries to work from. HMRC's online disclosure service is designed for situations like that.

Other situations require specialist help:

• You never registered for Self Assessment and have not filed returns for several years
• You have income from other sources, not just driving, that was also not declared
• HMRC has already written to say it is opening a formal enquiry into your tax affairs (this is a specific legal process, separate from a nudge letter)
• The letter refers to Code of Practice 9: this is HMRC's process for cases where it suspects deliberate fraud. It is a separate and more serious procedure that requires a specialist tax adviser, not a standard voluntary disclosure

If any of these apply, the standard online disclosure route is not the right one. Seek advice from a tax specialist with specific experience in HMRC compliance work before doing anything else.

Not sure where you stand?

If you have received a nudge letter and you are not certain whether your return was correct, or you are not confident about the disclosure process, get in touch with us.

We work specifically with private hire drivers. We can look at your situation, explain what the letter is actually asking, and tell you clearly whether we can help or whether your case needs a specialist.

There is no charge for an initial conversation.