HGV Lorry Driver Tax UK 2026/27: Overnight Allowances, CPC and a £42,000 Example
HGV drivers can claim overnight subsistence and Driver CPC training costs against tax, whether employed or owner-operator self-employed. Full worked example on £42,000 income both ways.
Employed or owner-driver: two very different tax pictures
HGV driving spans two quite different tax situations: employed drivers, paid PAYE by a haulage firm and driving a company vehicle, and owner-drivers, who own or lease their own truck, take on their own haulage contracts, and are self-employed. The deductible expenses available differ enormously between the two — an employed driver's claims are mostly limited to CPC training (if self-funded) and topping up under-paid overnight subsistence, while an owner-driver can deduct the full range of vehicle running costs.
Take-Home Pay Calculator
Calculate your net salary after income tax, National Insurance and student loan deductions.
Open Take-Home Pay calculatorWorked example: employed driver, £42,000 income
Gross annual salary: £42,000
Income tax: (£42,000 − £12,570) × 20% = £29,430 × 20% = £5,886
Employee National Insurance: (£42,000 − £12,570) × 8% = £29,430 × 8% = £2,354
Total tax and NI: £8,240
Take-home: £42,000 − £8,240 = £33,760
Overnight subsistence: the industry-specific scale rate
HMRC has agreed a specific scale rate with the Road Haulage Association covering tax-free overnight subsistence payments for HGV drivers who sleep in their cab away from home, recognising the practical reality of long-haul work. If an employer pays this rate or less, it's simply tax-free — no further claim needed. If an employer pays nothing, or less than actual reasonable costs, a driver may be able to claim tax relief on the shortfall directly from HMRC.
Self-Employed Tax Calculator
Calculate income tax, Class 2 and Class 4 National Insurance for self-employed and sole traders for 2025/26.
Open Self-Employed Tax calculatorWorked example: self-employed owner-driver, £42,000 taxable profit
For an owner-driver, £42,000 would typically be the taxable profit after deducting fuel, maintenance, insurance, finance costs and capital allowances from a much larger turnover figure (often well over £100,000 given fuel and vehicle costs).
Income tax: (£42,000 − £12,570) × 20% = £29,430 × 20% = £5,886
Class 4 NI: (£42,000 − £12,570) × 6% = £29,430 × 6% = £1,766
Total tax and NI: £7,652
Take-home from this taxable profit: £42,000 − £7,652 = £34,348
Fuel Cost Calculator
Calculate the fuel cost for any journey based on distance, MPG and fuel price.
Open Fuel Cost calculatorDeductible expenses checklist (owner-drivers)
- Fuel, tolls and congestion charges
- Vehicle maintenance, tyres, repairs
- Insurance and vehicle finance interest
- Capital allowances/Annual Investment Allowance on the vehicle
- Driver CPC periodic training
- Accountancy fees
Filing and paying
Employed drivers have tax deducted automatically via PAYE and can claim CPC or subsistence shortfalls via a P87 or Self Assessment. Owner-drivers register for Self Assessment once income exceeds £1,000, keep detailed vehicle and fuel records, and file online by 31 January following the tax year end.
uk-self-employed-allowable-expensesFrequently asked questions
Can employed HGV drivers claim overnight subsistence tax relief?
Yes. Many haulage employers pay a tax-free overnight subsistence allowance for nights spent away from home in the cab (HMRC has agreed a specific industry scale rate with the Road Haulage Association for this purpose), and where an employer doesn't pay this or pays less than actual costs, a driver can claim tax relief on qualifying overnight expenses directly from HMRC.
Is Driver CPC training tax deductible?
For employed drivers, Driver CPC periodic training required to keep an existing licence current is generally an allowable expense if the driver bears the cost personally (many employers pay for it directly, in which case there's no personal claim to make). For self-employed owner-drivers, ongoing Driver CPC training is a deductible business expense; the original vocational licence needed to start driving professionally is treated as a capital cost of entering the trade.
Are owner-driver HGV operators self-employed or employed?
Owner-drivers who own or lease their own vehicle, take on their own haulage contracts, and bear the commercial risk of the work are self-employed. Drivers who drive a company-owned vehicle under a haulage firm's direction and control are employees, even if paid a day rate rather than a salary.
How much tax does an employed HGV driver pay on £42,000 income?
Income tax and employee National Insurance combined come to roughly £8,900, leaving take-home pay of approximately £33,100 across the year, before any additional overnight subsistence relief.
What can a self-employed owner-driver claim that an employed driver can't?
Owner-drivers can deduct vehicle running costs (fuel, maintenance, insurance, finance costs), the Annual Investment Allowance or capital allowances on the vehicle itself, and a wider range of business costs — a much larger deduction base than an employed driver, who is largely limited to CPC training (if self-funded) and any shortfall in overnight subsistence.
Try the calculators
Take-Home Pay Calculator
Calculate your net salary after income tax, National Insurance and student loan deductions.
Self-Employed Tax Calculator
Calculate income tax, Class 2 and Class 4 National Insurance for self-employed and sole traders for 2025/26.
Fuel Cost Calculator
Calculate the fuel cost for any journey based on distance, MPG and fuel price.
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