To test whether a waste collection route pays, take the revenue from that route, subtract every cost of running it, and see what is left to cover the business’s wider overheads. A full diary is not the same as a profitable route.

Step 1: Add up route revenue on one basis

Total the agreed prices for every confirmed job on the route. Use one VAT basis throughout. HMRC says only VAT-registered businesses charge VAT, and registration becomes compulsory once taxable turnover goes over £90,000 in a rolling 12 months. If you are registered, work with prices and costs excluding VAT, because the VAT you charge is not yours to keep and the VAT on costs can usually be reclaimed. If you are not registered, use the full amounts you pay for costs.

Step 2: Subtract the route’s own costs

These are costs that exist because the route ran:
– crew wages for the whole shift, including travel and waiting time
– vehicle hire, or a fair daily share of owning the vehicle
– fuel
– tipping fees at the transfer station
– card or booking fees
– consumables such as bags, gloves and cleaning

What is left is the route’s contribution.

Step 3: Check the contribution covers overheads

The contribution has to pay for costs that do not belong to one route: insurance, registration, marketing, phone and software, accountancy, vehicle maintenance, time spent quoting, and days lost to breakdowns or bad weather. If you do unpaid loading or admin yourself, cost that time too, or the figures will look better than a sustainable business would be.

An illustrative worked example

The figures below are invented to show the method. They are not market prices, typical costs or a forecast.

Scenario B only works if the extra five jobs fit on the same vehicle in the same shift. If they push the load over the vehicle’s weight limit or fill it, you need an extra tipping trip (scenario C), which adds time, fuel and fees. The vehicle’s weight limits and safe loading cap how many jobs fit; they cannot be stretched to make a spreadsheet work.

Step 4: Replace estimates with actual results

Plan with estimates, then record what really happened: start and finish times, loading time per job, time queuing at the tip, weight tipped and money taken. Track cancellations, failed access and refused items separately, because they use time without producing revenue.

Compare several ordinary weeks, not one busy one. Prices and demand during a disruption, such as a council collection strike, may not last.

When to get advice

An accountant can help you set up the calculation, decide on VAT registration and treat vehicle costs correctly. This guide is general information, not financial advice.

The bottom line

A route is promising when its real results, over several ordinary weeks, leave enough contribution after its own costs to cover the business’s overheads. A positive number on one day is a reason to run a pilot, not to buy a fleet.

Sources

This guide draws on the following sources, checked on 30 September 2026:

• HMRC (GOV.UK), “Charge, reclaim and record VAT”
• HMRC (GOV.UK), “Register for VAT”
• DVSA (GOV.UK), “Securing loads on HGVs and goods vehicles”

Related guides

Compare Waste Removal is an independent guide. We may earn a fee from some links; this never affects what we write. This is general information, not legal advice.