Tax Planning & Reviews for Locum Doctors

What does a tax planning review include?

Our tax planning reviews involve a comprehensive analysis of your professional income, expenses, and available reliefs. We examine your current business structure and pension position. The review identifies opportunities to utilise allowances like the £500 dividend allowance or £10,500 employment allowance. All advice is tailored to the specific regulations governing UK healthcare professionals.

How can I legally reduce my tax?

Tax liability can be reduced by ensuring all professional expenses are claimed and all statutory allowances are utilised. This includes the £12,570 personal allowance and various business reliefs. You may also consider the timing of equipment purchases or pension contributions. Medical.Accountants provides remote, UK-wide advice to help healthcare workers maintain tax efficiency.

What is the £100k tax trap?

The tax trap occurs because the £12,570 personal allowance is tapered away once adjusted net income exceeds £100,000. For every £2 earned above this limit, £1 of the allowance is lost. This results in a high effective tax rate on income within this specific bracket. Careful planning is required for doctors moving into senior roles.

How do pension contributions reduce tax?

Most NHS doctors and many healthcare staff are members of the NHS Pension Scheme. Contributions are deducted through payroll, and locum or private work can count only through the correct forms. High earners should check the annual allowance each year, as pension growth can trigger a tax charge.

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

Is Gift Aid worth claiming?

You can claim tax relief on costs incurred wholly and exclusively for your work: HMRC-approved professional fees such as GMC, NMC, GDC or HCPC registration and approved royal college and union subscriptions, uniform laundering, and business mileage between workplaces. Ordinary commuting and most exam or training costs for new qualifications are not allowable. Employees can claim back up to four tax years.

When should I review my tax position?

You should review your tax position annually or whenever your clinical income significantly changes. Key triggers include becoming a partner, starting private work, or reaching the £50,000 MTD for Income Tax threshold in April 2026. Regular reviews ensure you meet the 31 January filing deadline. We provide ongoing support for doctors throughout their careers.

Can tax planning help with property income?

Tax planning can help identify the most efficient way to hold and manage your property portfolio. This includes understanding how property income interacts with your medical earnings and personal allowance. We can assist with calculations for Self Assessment filings due each January. Our remote service covers property-owning healthcare professionals across the United Kingdom.

How much does a tax review cost?

Our packages for locum doctors start at £45.83 + VAT a month, with Core at £62.50 and Growth at £75 + VAT. The right package depends on your income sources, whether you trade through a company and any payroll, VAT or pension work. We confirm the exact fee in writing before any work begins, so there are no surprise invoices.

How much tax does a locum doctor pay in the UK?

Locum doctors pay income tax on taxable profit at 20%, 40% and 45%, plus Class 4 National Insurance on self-employed profit. Payments on account mean your first bill can include half of next year's tax too. Where income also comes from overseas, residence status and split year treatment decide what the UK taxes.

Should a locum doctor be a sole trader or a limited company?

A limited company can suit locum doctors with substantial private or outside-IR35 income that is not all needed to live on, because profit is taxed at corporation tax rates and can be paid out over time. It brings extra accounts, payroll and filing costs, and NHS employment income cannot move into it. We model sole trader against limited company on your real figures first.

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

Help with this question: Self Assessment Tax Returns for Locum Doctors

Is locum work through an agency or trust bank inside IR35?

For locum engagements with NHS bodies, the hirer must decide IR35 status and issue a Status Determination Statement; the small-company exemption does not apply to public bodies. The test looks at control, substitution and mutuality of obligation in the actual working arrangement. You can ask the hirer to review a determination you disagree with, and it must respond within 45 days.

Help with this question: IR35 Reviews for Locum Doctors

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.

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.

Help with this question: Self Assessment Tax Returns for Locum Doctors

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.