by Asim Abbas
11 November 2026 
Locum doctors and tax: sole trader or limited company?
Locum doctors and tax: sole trader or limited company?
Locum work gives doctors flexibility and often higher hourly rates, but it also brings tax returns, pension decisions and the question of whether to work through a limited company.
- Most locum GPs work as self-employed sole traders
- Locum income goes on a Self Assessment return
- NHS pension access usually means staying self-employed
- IR35 often limits the benefit of a limited company
The answer has shifted in recent years because of IR35, NHS pension rules and the 2026/27 tax changes.
This guide explains how locum income is taxed and the key decisions every locum GP or hospital doctor should think about.
How locum income is taxed
Locum GPs are usually self-employed. You invoice practices, declare your income and expenses on the SA103 pages of your tax return, and pay Income Tax and Class 4 National Insurance. Hospital locums engaged through agencies may be paid through PAYE or an umbrella company instead.
Expenses locums can claim
- GMC registration and medical defence or indemnity fees
- Royal college and BMA subscriptions
- Travel to practices that aren’t a permanent workplace
- Medical equipment and textbooks
- Professional courses and appraisal costs
- Accountancy fees and a share of phone and home office costs
NHS pension
Self-employed locum GPs can usually contribute to the NHS Pension Scheme on their locum earnings, using the locum A and B forms. Working through a limited company generally means losing access to the NHS scheme for that work, which for many doctors outweighs any tax saving.
A locum GP earns £95,000 of self-employed income with £6,000 of expenses. Profit of £89,000 means Income Tax of about £23,032 and Class 4 National Insurance of about £3,040. Pension contributions reduce the Income Tax and help keep income below the £100,000 taper.
Income tax calculator
Including the £100,000 taper.
Should you use a limited company?
- IR35: most NHS engagements are assessed as inside IR35, which removes much of the company tax benefit
- NHS pension: usually lost for company work
- 2026/27 rates: extracting all profit through dividends now often costs more than being a sole trader
- Private work: a company may still suit significant private, medico-legal or aesthetic work
See our comparison of sole trader vs limited company.
Fixed-fee accountancy support
Transparent monthly packages for sole traders, landlords and limited companies. Fixed fees agreed upfront, VAT included.
Get a fixed-fee quoteCall 0161 531 4179Watch the £100,000 and £125,140 thresholds
Many locums earn over £100,000, where the personal allowance tapers away and the effective tax rate reaches 60%. Pension contributions and Gift Aid can bring adjusted net income back down. If you receive Child Benefit, the charge starts at £60,000.
Our accountants for doctors and locums handle locum returns, NHS pension forms and planning. HMRC’s guidance on IR35 explains the off-payroll rules.
What should I do next?
Practice by practice.
Each month, on time.
Against £60,000 and £100,000.
Frequently Asked Questions
Do locum doctors need to file a tax return?
Yes, if you have self-employed locum income. Many salaried doctors also file because of higher income or Child Benefit.
Can locum GPs pay into the NHS pension?
Usually yes, on self-employed locum earnings, using the locum A and B forms.
Is a limited company better for locums?
Rarely for NHS work, because of IR35 and loss of NHS pension access. It can suit significant private work.
Can I claim my GMC fees?
Yes. GMC registration, indemnity and professional subscriptions are allowable expenses.
Can Wingate help with locum tax?
Yes. We specialise in doctors and locums, including returns, pension forms and planning.
Need help with this? Wingate Accountants offers fixed-fee online accountancy support across the UK. Call 0161 531 4179 or request a quote at wingateaccountants.co.uk.
About the Author
Asim Abbas
I’m Asim Abbas, founder of Wingate Accountants and a Chartered Certified Accountant. I help sole traders, landlords and directors stay on top of their tax with fixed fees and plain-English advice.
