Last updated: 18 October 2026
Should a driving instructor be taxed on a car benefit?
Usually yes, if the instructor is an employee and the car is available for private use. A dual-control tuition car provided by a driving school employer is a company car if the instructor can use it for personal journeys, including commuting, and the benefit in kind is based on the list price and CO2 emissions. There’s no exemption just because the car is mainly used for lessons. If private use is genuinely prohibited and doesn’t happen, there’s no benefit. Self-employed franchisee instructors who lease the car from the school aren’t taxed on a benefit; they claim the costs as business expenses.
Employee or franchisee?
| Arrangement | Car benefit? | Tax treatment of car costs |
| Employed instructor, car available for private use | Yes, P11D or payrolled | Employer claims capital allowances and running costs |
| Employed instructor, private use banned and enforced | No | Employer only |
| Self-employed franchisee leasing a car from the school | No | Instructor deducts lease and running costs, adjusted for private use |
| Self-employed instructor owning their own car | No | Capital allowances and running costs, less private use |
The dual controls
Accessories fitted to a company car normally increase the list price used for BiK. Equipment fitted only because it’s needed for the instructor’s duties, such as dual controls, may be excluded, so check how your payroll provider has treated it. Ask the school for a breakdown of the car’s price and the cost of any conversion so the right figure is used.
Example
Sophie is employed by a driving school and has a £24,000 electric tuition car, which she takes home and uses at weekends. In 2026/27 her BiK is 4%, so £960, costing her £192 in tax as a basic rate taxpayer. The school pays Class 1A of £144. If the school banned private use and she left the car at the depot, there would be no benefit. A diesel tuition car at 37% would cost her £1,776 in tax.
Commuting
Driving home and back is private use for company car purposes. A pool car exemption won’t apply where a car is used by one instructor and kept at their home.
Self-employed instructors
Most instructors are self-employed, paying a franchise fee. They claim car costs and either:
- Actual costs, with capital allowances, less a private use proportion, or
- Simplified mileage of 55p a mile for the first 10,000 business miles in 2026/27 (45p in earlier years) and 25p a mile after that
Common mistakes
- Assuming tuition cars are exempt from BiK
- Not enforcing private use bans
- Self-employed instructors not adjusting for personal use
- Not checking how dual controls have been treated in the list price
Records to keep
Keep the car’s list price and CO2 figures, a written policy on private use and mileage logs.
Frequently asked questions
Is fuel for lessons a benefit?
Only private fuel provided by the employer creates a fuel benefit.
Does a franchise fee include a car?
Often, but it’s a business cost for the instructor.
Are electric tuition cars common?
Yes, and the low BiK makes them attractive.
Can HMRC check private use?
Yes, through mileage and insurance records.
Related: company car tax rises, providing a van to a worker and employee or self-employed status.
Talk to Accotax
Want this handled for you? Our team at Accotax can help with driving instructor tax. See our payroll services service, or contact us for a free, no-obligation quote.
This page is general guidance based on HMRC rules for the 2026/27 tax year, checked against gov.uk on 18 October 2026. It is not personal advice, so speak to an accountant about your own situation.
