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Specialist accountants for Locum doctor: sole trader or limited company? · Fixed fees · Free first call

Locum doctor: sole trader or limited company?

For many locum doctors in 2026/27, staying a sole trader gives similar or higher take-home pay than a limited company once dividend tax rises and NHS Pension rules are counted. The worked example below shows why, and when a company can still make sense.

Quick answer

Medical.Accountants, the dedicated healthcare team of ACCOTAX London Limited (ICAEW and ACCA regulated chartered accountants) helps locums across the UK with accounts, tax returns, NHS Pension annual allowance checks and IR35 questions. Fees start from £45.83 + VAT a month for limited company packages, agreed in writing before work starts, and your first general call is free. Detailed technical tax advice is a paid, booked consultation. Book paid tax advice.

Should a locum doctor set up a limited company?

Often not, if you take out all the profit. In our 2026/27 example at £80,000 profit, a sole trader keeps about £57,711 and a company director drawing everything keeps about £55,765, before company running costs. A company can help if you leave profits in the company, work outside IR35 and do not need NHS Pension on that work.

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Fixed fees, specialist healthcare accountants, and every HMRC and NHS Pensions deadline handled.

  • Fixed monthly fee, no surprises
  • Specialist in NHS pension and healthcare tax
  • Onboarding within 48 hours
Get my fixed-fee quoteBook a free 15-minute first call
  • ICAEW & ACCA regulated
  • 5,000+ clients served by ACCOTAX
  • Specialist healthcare accountants

Reviewed by Waqas Sagar ACA FCCA FMAAT, Founder of ACCOTAX, 18+ years' experience · Last reviewed: 29 October 2026 · Updated for the 2026/27 tax year

Medical.Accountants by ACCOTAX, ICAEW/ACCA-regulated chartered accountants, London, serving clients across the UK. Over 5,000 clients served.

Key takeaways

  • Dividend tax rates rise by 2 percentage points from 6 April 2026 (10.75% basic, 35.75% higher).
  • Locum GP work done through a limited company is generally not pensionable in the NHS Pension Scheme.
  • Inside-IR35 engagements remove most of the tax advantage of a company.
Worked 2026/27 example: £80,000 locum profit, all profit drawn (before NHS Pension, student loan and company running costs)
Sole traderLimited company
Income Tax / Corporation Tax£19,432£13,818 Corporation Tax
National Insurance£2,856.60 Class 4£1,135.50 employer NI
Dividend taxNone£9,282
Approximate take-home£57,711£55,765

Free guide: The Doctor's Tax & NHS Pension Handbook 2026/27

Get the free guide

Which accountancy support fits your income?

Start with how you are paid. Different income sources can need different accounts, returns and expense checks.

How you workWhat we checkSupport to explore
Employed or umbrella (PAYE)Tax codes, eligible employment expenses and whether a tax return is needed.Healthcare tax refund support
Genuinely self-employedBusiness income and expenses, Self Assessment and MTD eligibility.Healthcare Self Assessment service
Your own limited companyCompany accounts, Corporation Tax, director income and off-payroll status where relevant.Healthcare limited company accounts
PartnershipPractice accounts, allocated profit and each partner’s personal tax position.Healthcare partnership accounts

Sound familiar?

What problems do we fix for locum doctors?

  • "I don't know if I should be a sole trader, a limited company or use an umbrella."
  • "A trust or agency has sent me an IR35 determination I don't understand."
  • "My first tax bill was huge because of payments on account."
  • "I keep missing or getting my locum A/B and Type 2 pension forms wrong."
  • "I spend hours chasing unpaid invoices."
  • "I'm not sure what I can claim, indemnity, GMC, mileage?"
  • "Making Tax Digital quarterly updates start from April 2026 and I'm not ready."

What it's costing you

What does it cost to leave your tax unchecked?

Overpaid tax
Unclaimed expenses and wrong tax codes mean paying more than you owe, year after year.
HMRC penalties and interest
Late returns attract automatic penalties, plus interest on tax paid late.
Lost evenings
Hours spent on forms, invoices and spreadsheets after a long shift.

General examples, your position depends on your own figures.

How we solve it

What does a specialist medical accountant do?

Structure review

A take-home comparison of sole trader, limited company and umbrella for your shifts.

IR35 check

We review each Status Determination Statement and help you challenge it where justified.

Pension form management

We prepare and track your locum A/B and Type 2 forms.

MTD-ready bookkeeping

Quarterly updates handled with software set up for you.

How we help

01

Structure comparison

Sole trader and company take-home compared using your own shifts, pension position and plans for the profits.

02

Company set-up and accounts

Company formation, payroll and annual accounts if a company is the right answer.

03

IR35 checks

Each Status Determination Statement reviewed against how the engagement actually runs.

04

Locum pension forms

Locum A/B and Type 2 forms kept up to date for pensionable self-employed work.

What to know before you decide

Worked example: £80,000 locum profit in 2026/27, sole trader

Income Tax: nil on the first £12,570, 20% on the next £37,700 (£7,540) and 40% on the remaining £29,730 (£11,892), so £19,432. Class 4 National Insurance: 6% on £37,700 (£2,262) and 2% on £29,730 (£594.60), so £2,856.60. Total tax £22,288.60, leaving about £57,711 take-home. NHS Pension contributions are left out to keep the comparison like-for-like.

Self Assessment Tax Returns for Doctors & Healthcare Professionals

Worked example: £80,000 profit through a limited company

Director salary of £12,570 with employer National Insurance of 15% above £5,000 (£1,135.50; a one-director company cannot claim the Employment Allowance). Company profit of £66,294.50 pays Corporation Tax with marginal relief of about £13,818, leaving £52,476 to pay as dividends. Dividend tax: £500 allowance, 10.75% on £37,200 (£3,999) and 35.75% on £14,776 (£5,283), so about £9,282. Take-home is about £55,765 before accountancy and other company running costs.

Limited Company Accounts & Corporation Tax for Doctors & Healthcare Professionals

What the example means

At this level, the sole trader keeps roughly £1,950 more if all profit is drawn. A company becomes more attractive when profits are retained in the company for later years, when income is well above the higher-rate band, or when a spouse is a genuine shareholder doing real work. It is usually less attractive when engagements are inside IR35 or when you want NHS Pension on locum work.

What a specialist should check before you decide

Your IR35 status for each engagement, whether the work is pensionable in the NHS Pension Scheme, your annual allowance position, student loan repayments, and whether you need the money personally each year. This is general information, not advice for your situation.

How much does it cost to run a locum company?

Medical.Accountants limited company packages start from £45.83 + VAT a month (£549.96 a year before VAT and extras). Sole-trader locum work is quoted after a free general first call. Company formation is £150 + VAT plus the £100 Companies House fee.

Your questions answered

Can locum GPs pension limited company income in the NHS Pension Scheme?

Generally no. NHS Pensions treats locum GP work as pensionable when it is done as a self-employed locum and recorded on locum A and B forms. Work billed through your own limited company is generally not pensionable, which can outweigh any tax saving.

Check the official guidance · www.gov.uk

Help with this question: NHS Pension Tax & Annual Allowance for Doctors & Healthcare Professionals

Help with this question: Limited Company Accounts & Corporation Tax for Doctors & Healthcare Professionals

Want us to check this for you? Get a free first call →

Does IR35 apply to locum doctors working for NHS trusts?

Yes. NHS trusts are public bodies, so they must issue a Status Determination Statement for each off-payroll engagement. If it is inside IR35, tax and National Insurance are deducted as if you were employed.

Help with this question: IR35 Reviews for Doctors & Healthcare Professionals

Want us to check this for you? Get a free first call →

What documents do I need for my return?

You typically require P60s, P11D forms, interest certificates, and records of all business income and expenses. Medical.Accountants provides a tailored checklist based on your specific healthcare role. We will request these details during our onboarding process. Providing comprehensive documentation ensures your tax position is accurately calculated.

Want us to check this for you? Get a free first call →

What are payments on account?

Payments on account are advance payments towards your next Self Assessment bill, normally due on 31 January and 31 July. Each is usually half the previous year’s relevant Income Tax and Class 4 National Insurance bill, excluding Capital Gains Tax and student loans. Exceptions apply where the bill is below £1,000 or over 80% was collected at source.

Check the official guidance · www.gov.uk

Help with this question: Self Assessment Tax Returns for Doctors & Healthcare Professionals

Want us to check this for you? Get a free first call →

Can I amend a return after filing?

You can generally amend a Self Assessment return within 12 months of the 31 January filing deadline. This allows you to correct errors or include forgotten information. Medical.Accountants can assist in reviewing previous submissions to ensure accuracy. Tax refunds can be claimed for up to four previous tax years.

Check the official guidance · www.gov.ukWant us to check this for you? Get a free first call →

Quick quote

See what you could save, get a fixed fee in one working day

Three fields. No obligation. A specialist replies, not a sales team.

Packages for your working life

Accountancy packages for locums

Self-employed income, a limited company, PAYE or a mixture: start with the support that matches how you actually work. We check your status and agree the scope and fee before starting.

Self-employed accountants for locums packages

For genuine sole-trader income. We prepare your business accounts and Self Assessment, review allowable expenses and explain payments on account.

  • Sole-trader accounts and personal tax return
  • Allowable business expenses reviewed
  • Tax reserve and payment deadline guidance
  • MTD support scoped separately where required

Fixed fee quoted after a review

Discuss this package

Medical accountants for locums: limited company packages

For clinicians working through their own company. Choose Essential/Compliance, Core/Complete or Growth according to your accounts, bookkeeping and payroll needs.

  • Statutory accounts and Corporation Tax return
  • One director return for salary and dividends from the same company
  • Confirmation statement support; filing fee extra
  • Bookkeeping, VAT and payroll according to your chosen plan

Company packages from £45.83 + VAT / month

Compare company packages

Personal tax return packages for locums

For employed clinicians, partners and people with mixed income who need a return. We check whether Self Assessment is required and reconcile the relevant income, expenses and pension tax information.

  • Self Assessment requirement checked
  • PAYE and other income reconciled
  • Eligible employment expenses reviewed
  • Pension tax work agreed separately where needed

Fixed fee quoted after a review

Discuss this package

Employment status is determined by the facts, not the package you choose. PAYE, umbrella and partnership arrangements may also apply. A limited company does not override IR35 or off-payroll rules, and not every employed clinician needs a tax return.

Overpaid tax?

Tax refund support for locums

We review tax codes, eligible professional expenses and overpaid tax, then prepare a claim where you qualify. A refund is not guaranteed; HMRC decides the claim.

£249 + VAT

For refunds up to £5,000, our fee is £249 plus VAT. For refunds above £5,000, add 5% of only the amount above £5,000 to the £249 fee. VAT applies to the total professional fee.

Example: a £6,000 refund means £249 + £50 = £299 plus VAT.

Professional fee, excluding VAT

£249

Ask about a tax refund

This illustrates the fee only, not whether you qualify or how much HMRC will refund. We agree the claim scope and payment terms before work starts.

What's included

How much does a medical accountant cost?

Limited company packages, compare what's included

Essential/Compliance

For locums, salaried GPs and dentists with a limited company

from £45.83 + VAT /month

  • FRS 105 or FRS 102 1A statutory accounts
  • Corporation tax return (CT600) and tax computation
  • Confirmation statement preparation and filing support
  • One director Self Assessment return
  • Deadline reminders ahead of every filing date

Core/Complete

For private practice, consultants and associate dentists

from £62.50 + VAT /month

  • Everything in Essential/Compliance
  • Monthly bookkeeping and bank reconciliation
  • Quarterly Making Tax Digital VAT returns
  • Director payroll with RTI filing and pension submissions
  • Quarterly review call on numbers and tax position

Growth

For clinics, dental practices and growing medical teams

from £75.00 + VAT /month

  • Everything in Core/Complete
  • Payroll for up to five employees

Prices exclude VAT. Making Tax Digital quarterly updates available as an add-on. Compare fees

Why clinicians trust us

Why choose chartered accountants who know the NHS?

  • ACCOTAX has served over 5,000 clients.
  • Regulated chartered accountants (ICAEW and ACCA).
  • Founded by Waqas Sagar ACA FCCA FMAAT, with 18+ years' experience.

Reviewed by Waqas Sagar ACA FCCA FMAAT

Chartered accountant and founder of ACCOTAX. Last reviewed October 2026.

Get my fixed-fee quote

How it works

  1. 01

    Free call

    A 15-minute chat about your income, structure and deadlines.

  2. 02

    Onboarding in 48 hours

    We set up your records, software and HMRC agent access.

  3. 03

    We handle the rest

    HMRC, NHS Pensions and every deadline, with reminders before each one.

Free resource

Get the locum expenses checklist free

Tell us where to send it and we'll email it to you.

What do clients usually ask?

Is a limited company always better for a locum doctor?
No. In our 2026/27 example at £80,000 profit with all profit drawn, the sole trader kept about £1,950 more.
What changed for dividends in 2026/27?
From 6 April 2026 the ordinary dividend rate is 10.75% and the upper rate 35.75%; the additional rate stays at 39.35%. The dividend allowance is £500.
Can you work out my own figures?
Yes. A general first call is free; a personalised structure comparison is paid work agreed in writing.

How do I speak to a specialist?

Leave your details and we'll call you back, or book a free first call straight away.

Book a free 15-minute first call

Related healthcare expertise

Locum doctor accountants: tax, IR35 and NHS pensionsIR35 for Locum Doctors & NursesAccountant for doctors: specialist doctors accountants across the UKSpecialist vs general accountant: cost compared for doctorsMedics Money accountant directory: how our £45.83/month package comparesTax refund service for doctors: £249 + VAT
Accountants for healthcare professionalsHealthcare tax questions answered

About the author

Waqas Sagar ACA FCCA FMAAT

Founder of ACCOTAX and chartered accountant, with 18+ years' experience advising UK clients, including doctors, dentists and healthcare businesses.

Reviewed by Waqas Sagar ACA FCCA FMAAT on

General information for the 2026/27 tax year, prepared from the official guidance linked below. It is not personalised tax or regulated financial advice. Rules and circumstances can change; confirm your position before acting.

Official sources referred to on this page: GOV.UK dividend tax; GOV.UK Corporation Tax rates; GOV.UK National Insurance rates; NHS Business Services Authority.

Official guidance

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