A conversation with a friend considering this profession prompted me to research this topic more thoroughly. In today's article, we'll conduct research specifically for him and for anyone interested in this career path. Current situation and trends, without speculation.
Startup costs for a taxi driver in Bristol begin with obtaining a license, which includes application fees, administrative checks, and the permit itself.
| Type of Expense | Fee (Approximate) | Description |
|---|---|---|
| Initial Application Fee | £25 | Paid when submitting documents |
| License (1 Year) | £135 | Paid after approval |
| License (3 Years) | ~£242 | More cost-effective over time |
| DBS Check | ~£25 | Criminal record check |
| DVLA Mandate Fee | £12 | Driving license check |
| Knowledge Test | £67 | Test of area knowledge and regulations |
| Total for Driver (1 Year) | ~£264 | (25 + 135 + 25 + 12 + 67) |
Licensing in neighboring areas often offers alternative terms and prices:
Taxi car insurance is another essential expense and is mandatory. Annual premiums can vary significantly depending on factors such as age, driving experience, vehicle model, and coverage.
Example Range: Depending on coverage (Third Party, Comprehensive), insurance for taxi operations (Private Hire/Hackney Carriage Insurance) can range from £1,500 to £4,000+ annually. You should also budget for additional Public Liability Insurance.
When choosing a vehicle, you have three main options – purchase, lease, or rent. Here's the cost analysis:
| Vehicle Category | Purchase Range | Lease (Monthly) | Rent (Weekly) | Rent (Monthly) |
|---|---|---|---|---|
| 1. Standard Car | £20,000 – £40,000 | £300 – £500 | £150 – £400 | £600 – £1,600 |
| 2. SUV | £30,000 – £60,000 | £450 – £800 | £350 – £600 | £1,400 – £2,400 |
| 3. Van (6+ seats) | £35,000 – £70,000 | £500 – £900 | £400 – £700 | £1,600 – £2,800 |
Important: It's crucial to budget for maintenance, with a recommendation to set aside 10% of income for potential maintenance costs, regardless of the arrangement.
Since April 2022 in England and Wales (and April 2023 in Scotland and Northern Ireland), taxi drivers must complete a tax check when renewing their license. This process:
Important: The licensing authority does not have access to your tax records - they only receive confirmation that you've completed the check.
Critical change for all taxi operators:
From 2 January 2026, taxi and private hire operators will no longer be able to use the Tour Operators' Margin Scheme (TOMS). This means:
Who is affected:
What to expect:
Important distinction: Operators outside London who work as "disclosed agents" may not be affected, as they charge VAT only on their booking fee, with the driver remaining the principal supplier of the service.
| Category | Time (Months) | Minimum Range (£) | Maximum Range (£) |
|---|---|---|---|
| Startup Time | 2 – 6 months | N/A | N/A |
| Initial Fees (Driver + Vehicle) | One-time | ~£506 | ~£506 |
| Annual Insurance | Annual | £1,500 | £4,000+ |
| Minimum Initial Budget | - | ~£2,006 | Over £10,000+ |
This covers only fees and insurance, excluding vehicle, tax registration, and operational costs.
After obtaining your license, you have multiple work opportunities:
Ride-hailing apps:
Advantages of app-based work:
Disadvantages:
An alternative to platforms are private transfer companies, which offer:
Services:
Advantages:
How to start:
The accounting firm Ttam Ltd can help you:
Bronze Plan is specially designed by Ttam Ltd for taxi drivers, offering optimized conditions and support for a successful business.
Free Resource: On our website, we offer a free spreadsheet for taxi drivers to help track income, expenses, and business efficiency.
Important Note: All fees are approximate and subject to change. Always check with Bristol City Council and HMRC for the most current information. The minimum budget of £2,006 (£506 licensing fees + £1,500 insurance) represents the absolute minimum to legally operate, but does not include vehicle costs or ongoing operational expenses.
Stay tuned for the blog post, where you'll find more useful tips and interesting information.
Would you mind leaving us a comment below with suggestions on what other business analysis or news you'd like to see in our next post?