If you’ve started your career as a locum GP, you’ll be aware of the benefits. You have more flexibility than a regular GP doctor and you can experience different surgeries, areas of medicine and localities without being tied to one for too long. But there are a lot of financial implications to becoming a locum GP – it’s not as straightforward as you might think and the set-up that works for your peers isn't necessarily right for you and your circumstances. This blog is a helpful guide to starting your career as a locum GP and the steps you need to take to ensure that you are financially secure and that you can maximise your income.
Should I become a locum GP?
A locum GP, in simple terms, is a substitute for another GP. They could be filling in for another GP who is on maternity leave or long-term sick leave for example. Locums can also be asked to fill in for much shorter sessions on an ad hoc basis. If you want a more flexible role or experience in a lot of different GP services, a locum position could be perfect for you. It is often a good choice for doctors with families who want more autonomy in their role to be able to fit around their home life.
How are locum GPs paid?
How locums are paid depends whether they are in a salaried position or not. If not, they are generally paid fees for their services. When entering a position, you should always have a contract with the practice, clearly outlining your fees or salary and any entitlements you have, such as sick pay, maternity leave etc.
Where do I start?
As soon as you’re qualified, you can begin working as a locum. You will also need to register with HMRC as self-employed – you can ask your accountant for help with this if you’re not sure. One of the first steps is deciding which area you would like to work in. This is important as you will have to build relationships and contacts here, so choosing an area that is familiar to you is always a good idea.
How do my taxes work?
As locums are self-employed, they have to submit an annual Self-Assessment Tax Return, detailing all of your income from the tax year. One of the benefits of being a locum is that you can offset any professional expenses against your trading profit, subsequently reducing your tax bill. Expenses are allowable for tax purposes if they are incurred ‘wholly and exclusively for purposes of the trade’. Locum GPs can claim expenses for things such as petrol, insurance, road tax, parking etc.
Can I still pay into an NHS pension?
As a locum, you can still pay into an NHS pension, if you are self-employed. An accountant can help you to establish the correct tiered rare for your pension contributions. This makes sure that you are paying the correct amount each year. They can also claim tax relief on your superannuation contributions, maximising your income.
Self-employed vs limited company
A key choice to make in the journey of becoming a locum GP is whether to be self-employed or set up a limited company. As a rule of thumb, if you want to pension your locum income or have an offset mortgage, you should definitely consider being self-employed. If you don’t depend on the income to live on or you don’t mind if your financial affairs are confidential or not, then self-employed could be the way to go. It very much depends on your specific circumstances, your earnings and future plans. You also need to be aware of the IR35 rules that came into effect in April 2017 as the new rules could result in Locum GPs operating through limited companies facing an extra tax charge. We have a specific guide for locums which highlights the key questions to address and ensure our clients select the right structure.
Locum life made simple
MyLocumManager is an online tool created for Locum GPs. They simplify the business admin that goes hand in hand with Locum work. Via their online platform you can schedule upcoming work, create invoices and pension forms and stay on top of your responsibilities. We have no financial arrangement with MyLocumManager, we just recognise their system works for Locums and through our tax service we are able to provide BW Medical Accountancy clients with a discounted subscription rate.
If you’re newly qualified and considering a career as a locum GP, or an established Locum wanting to review your financial position and review if the accountants you deal with are the right accountancy partner for you, speak to our tax department to discuss your options. BW Medical have niche expertise in the medical sector and can help you to make informed decisions regarding your career. Contact us today to find out more 0191 500 6930. email@example.com