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The Financial Realities of Being a Locum Doctor

The Financial Realities of Being a Locum Doctor One of the many factors that attract physicians to the idea of becoming a Locum Doctor is the competitive pay package. Whilst this is undoubtedly a benefit, with it comes financial implications that you may not have previously considered. BW Medical offers expert advice regarding your tax returns, NHS pension and overall finances as a Locum – we help you enter into this niche vocation with your eyes wide open.


When you become a Locum GP, you effectively become self-employed and you must inform HM Revenue and Customs (HMRC). As a self-employed Locum, you are responsible for submitting your own tax return each tax year (6th April – 5th April). Sound daunting? BW Medical has a wealth of experience in advising Locums about their tax returns – we offer services from the preparation of annual accounts and your Income Tax Return, to the calculation of tax liabilities.

Locums are also required, where possible, to select which legal structure and trading style is most appropriate for their work. Deciding to set up a limited company is not always the best option for a Locum, despite widespread belief. We help you achieve the most appropriate legal structure for you, which in turn could have benefits such as reducing your income tax rate from 40% to 20% and reducing your National Insurance contributions. As you are self-employed, your financial and fiscal situation is unique to you, so ensure you seek specialist advice that is tailored specifically to you.

Personal Expenses As a self-employed Locum, it is likely that you will incur personal expenses for duties such as travelling between GP surgeries and hospitals in which you are practicing. The team at BW Medical can advise you on the expenses you can claim and ensure you claim back all ‘allowable expenses’, i.e. all those expenses that are incurred wholly for the purpose of your trade. (Our experts can help you calculate which proportion of your motor vehicle travel was used for business, thus giving you the chance to claim back your motor expenses.)

National Insurance Contributions Many Locums will not have other sources of income alongside their Locum income. However, a large number of Locums will also have a salaried income from a hospital or doctor’s surgery. What many people do not realise is that both sources of income are liable to National Insurance Contributions.

However, it is essential that Locums do not simply pay the maximum National Insurance contributions on their practice income alone – you do not have to pay this amount. Non-specialist accountants may not pick up on this technicality, but here at BW Medical we always make sure you are not paying more National Insurance than necessary. We can also guide you through the steps you need to take to reclaim any past overpayments.

NHS Pension

As a Locum, you are only entitled to pension NHS earnings received directly from a practice. You can pay into the pension scheme if you undertake Locum work directly for an NHS GMS, PMS, APMS practice, an OOH provider or a PCO.

Your contribution to your NHS pension scheme depends upon how much you are anticipated to earn annually as a NHS GP. This can be a complex calculation to make, but our specialist team of medical accountants at BW Medical have a wealth of experience in establishing the correct tiered rate of contributions, to make sure you are paying the correct amount into your pension each year.

As a member of the NHS pension scheme, you must make superannuation contributions on your earnings each year. We can help you claim tax relief on your superannuation contributions, always bearing in mind that you should be paying no more and no less than what is necessary and realistic.

Without the correct guidance, the process of becoming a Locum GP is not simple, and neither is the management of your financial and fiscal situation. This is a very niche career choice, requiring specialist expertise and knowledge about the intricacies of medical accountancy and the NHS pension scheme. BW Medical act for Locums throughout England and can offer you the specialist accountancy and tax advice to help you on your way to a successful career as a Locum, without the worry of complicated finances. Contact us to get started.

David Elliot

David Elliot

Director - Tax

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  • BW Medical Accountants have a good working knowledge of General Practice and are keenly aware of the challenges Practices face within the changing environment of the NHS.  We have been very impressed by the way BW Medical continue to deliver the range of services they provide from Accounts to Tax and NHS Pension advice. 

    We have found Practice consultation and engagement from BW Medical specifically helpful to shape the future of the Practice.

    GP Partner
    GP Practice, Newcastle
  • We had no hesitation in moving to BW Medical Accountants.  For any business your accountant is integral, and for us one of the most important factors to this relationship is to have a personal and trusting approach, which BW have undoubtedly achieved. 

    The service we receive and the interest they show in our practice assures us that they have a genuine interest in us and commitment to us.  More importantly they are always helpful and polite to answer even the dumbest of questions!  They give us confidence and reassurance knowing that they are always very up-to-date with all the numerous changes within general practice and we would have no hesitation in recommending them to other practices seeking a professional and personal accountancy service.

    Jackie Rotherham, Practice Manager
    The James Street Family Practice, Lincolnshire
  • We changed to BW Medical Accountants and I would say we have just had the most transparent and understandable end of year meeting and the best planning advice I have ever had in 16 years of practice.

    GP Partner

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