Accountants for Locum Doctors

ACCOUNTANTS FOR LOCUM DOCTORS

Specialist accountants for locum doctors, locum GPs and agency clinicians working across the UK.

Locum work is the most tax-complicated way to practise medicine. The structure you trade through, the status decision your client makes, whether the work is pensionable and even the VAT treatment of the agency that placed you can each move your net income by thousands a year — and none of them are decided by you alone.

TaxDigit act for locum doctors across the UK from our Guildford office. We set the structure up correctly, keep the compliance quiet and predictable, and tell you the number you will actually keep.

What locums come to us for

• Sole trader, limited company or umbrella — modelled on your real day rates, not a rule of thumb.
• IR35 and off-payroll working — reviewing trust and agency status determinations and their effect on your company.
• Pensioning locum work — Locum A and B forms, the ten-week rule and monthly deadlines.
• Expenses — what a locum can actually claim, and the travel rules that catch people out.
• VAT — including the 2026 change in HMRC’s position on supplies of locum doctors.

Choosing how to trade as a locum

Limited company

A personal service company can be efficient where engagements fall outside the off-payroll rules and you do not need to draw all of the profit. It brings corporation tax at 19% or 25% with marginal relief between £50,000 and £250,000, dividend planning, and annual accounts and filings. The trade-off that catches locum GPs is pensionability: income earned through a limited company is generally not pensionable in the NHS scheme.

Sole trader or self-employed locum

Simpler, cheaper to run, and for locum GPs it keeps the work pensionable through the Locum A and B route. Profits are taxed at your marginal rate with Class 4 National Insurance, so at higher day rates the arithmetic can turn.

Umbrella company

Common where an engagement is inside IR35 and the agency will not deal with a personal service company. We check the deductions on your payslip are what they should be — umbrella arrangements vary considerably, and some do not withstand scrutiny.

IR35 and off-payroll working for locums

Since April 2017 a public-sector client — an NHS trust, a health board, an NHS commissioner — determines the employment status of a contractor working through their own company, and since 6 April 2021 it must issue a formal Status Determination Statement setting out its reasons, with a client-led disagreement process if you dispute it.

Inside-IR35 engagements have income tax and National Insurance deducted before your company is paid, which changes the case for running a company at all. We review determinations, model both outcomes and keep the company’s own filings correct either way.

NHS pension for locum GPs

Freelance GP locum work can be pensioned in the NHS scheme using Locum A and Locum B forms. Two practical points matter more than any other. First, there is a ten-week cut-off: a period of freelance GP locum work that ended more than ten weeks ago cannot be pensioned, and late forms are rejected. Second, contributions are due by the seventh of the month following the month of submission. This is an administrative cut-off, not a penalty regime — but the deadline is absolute, and missed months cannot usually be recovered.

Work paid through a limited company is generally not pensionable. GP SOLO work is a separate route again: it covers solo work such as out-of-hours and extended-access sessions paid by a commissioner or provider, and the form is submitted by that organisation rather than by you.

VAT and locum doctors — the 2026 change

Clinical care by a registered health professional is exempt from VAT under Group 7, Schedule 9 of the Value Added Tax Act 1994. Historically HMRC treated the supply of medical staff as a different thing from the supply of medical care, and therefore taxable.

That position changed in 2026. Following the First-tier Tribunal decision in the Isle of Wight NHS Trust case, HMRC published Revenue and Customs Brief 6 (2026) on 17 July 2026, accepting that supplies of GMC-registered locum doctors may fall within the exemption at Item 5 of Group 7 — the provision of a deputy for a registered medical practitioner — including where the doctor is supplied through an employment business. HMRC has been explicit that this does not extend to other healthcare professionals such as allied health professionals, physician associates or anaesthesia associates.

Where output tax has been over-declared, corrections can be made for the previous four years, subject to the usual rules including unjust enrichment. We have written about the brief and the refund claims it opens up, and we can review your position.

Expenses for locum doctors

Professional fees and subscriptions you pay yourself and are not reimbursed for: GMC registration as a statutory fee, and subscriptions to bodies on HMRC’s approved List 3 including the Royal Colleges and the Medical Protection Society, with relief on the British Medical Association subscription restricted to 85%.

Travel is where locums most often go wrong. Ordinary commuting between home and a permanent workplace is not allowable. Where a locum genuinely works at a series of temporary workplaces, travel to those sites may be, and the analysis depends on the pattern and expected duration of the engagements rather than on being a locum as such. Equipment, indemnity, mobile and home-office costs, and courses that maintain rather than acquire a qualification, are also worth reviewing properly.

What working with us looks like

• A structure decision made on your numbers, in writing, before you commit to it.
• Company accounts, corporation tax, self assessment, payroll and VAT handled on one fixed fee.
• Cloud bookkeeping and Making Tax Digital readiness — from April 2026 for qualifying income over £50,000, April 2027 over £30,000, April 2028 over £20,000.
• Chartered certified accountants in Guildford, acting for locums throughout the UK.

Frequently asked questions

Should a locum doctor use a limited company?

It depends on your day rate, how much you need to draw, whether your engagements sit inside or outside the off-payroll rules, and whether you want the work to stay pensionable in the NHS scheme. For a locum GP who values the pension, staying self-employed is often the better answer even where a company would save income tax. We model both before you decide.

Can I still pension my locum work if I use a limited company?

Generally no. Freelance GP locum income is pensioned through the Locum A and B route as a self-employed practitioner; income routed through a limited company is not pensionable. That lost pension accrual has to go into the comparison alongside the tax saving.

How long do I have to submit Locum A and B forms?

Ten weeks. A period of freelance GP locum work that ended more than ten weeks ago cannot be pensioned and late forms are rejected. Contributions are due by the seventh of the month following submission. It is worth building this into a monthly routine rather than dealing with it at the year end.

How does IR35 affect me if I locum for an NHS trust?

The trust decides your status and must give you a Status Determination Statement with its reasons. If the engagement is inside the rules, tax and National Insurance come off before your company is paid. If you think the determination is wrong, there is a client-led disagreement process, and we can help you use it.

Is my locum income subject to VAT?

Following Revenue and Customs Brief 6 (2026), published on 17 July 2026, HMRC accepts that supplies of GMC-registered locum doctors may fall within the VAT exemption as the provision of a deputy for a registered medical practitioner, including where supplied through an employment business. It does not extend to other healthcare professionals. If VAT has been charged and accounted for on supplies that were in fact exempt, corrections may be possible for the last four years.

Do I need to register for VAT as a locum?

Only if you make taxable supplies above the £90,000 registration threshold. Exempt supplies do not count towards it, which is precisely why the 2026 change in HMRC’s position matters — it can affect whether registration was ever required.

What can I claim as a locum doctor?

Professional registration and indemnity, subscriptions to approved bodies, equipment, relevant training that maintains your existing skills, and travel to genuinely temporary workplaces. Not ordinary commuting, and not the cost of obtaining a new qualification as a general rule. The travel analysis is fact-specific and worth doing properly rather than assuming.

I have NHS salaried sessions and locum work. How is that taxed?

The salaried sessions are taxed through PAYE, the locum work is not. Both go on one self assessment return, and the danger is the payments on account that follow the first year of locum profits. We forecast them so the January and July demands are planned for.

Do you act for locum doctors outside Surrey?

Yes. We are in Guildford and act for locum doctors throughout the UK. The work is done by video, phone and secure portal.

Information correct as at 12 August 2026. This page is general information about UK tax, VAT and NHS pension administration, not advice for any particular person; the VAT position on supplies of locum doctors is developing and individual circumstances differ. Please speak to us before acting on anything you read here.