Locum GPs: key facts about reporting income and claiming expenses

The National Association of Sessional GPs estimates that there are more than 17,000 GP locums working in the UK, temporarily taking the place of practice-based GPs.

Some GPs prefer the greater flexibility that comes from being a locum. Being a locum GP can offer a more varied working life when compared to a salaried GP role. It can provide the opportunity to try working at a practice or location before deciding on a more permanent move. Some employed GPs also work as part-time locum GPs, of course.

You might be a salaried GP who is considering becoming a self-employed locum GP or you could already have taken the plunge. Perhaps you’re employed as a GP but you’re considering taking on additional locum work. Whatever the case, you should know what the tax obligations are and the rules about claiming tax-deductible expenses, which can help to minimise your tax bill.

Locum GPs: What does “self-employed” mean?

As the name suggests, “self-employed” simply means working for yourself, rather than being an employee of the NHS, a GP practice or agency. Most locum GPs are self-employed (AKA sole-trader or freelance GPs), although some work via a private limited company they register, which is an alternative business formation option. Being self-employed (a sole trader) means you have responsibility for your own tax affairs.

What tax responsibilities do self-employed locum GPs have?

As a self-employed locum GP, you can set your own rates, which can enable you to earn a higher hourly or day rate than a salaried GP. Self-employed locum GPs are paid their fees directly for the days or hours they invoice for.

You must declare your taxable self-employed earnings via Self Assessment, the system HMRC uses to collect Income Tax and National Insurance contributions (NICs). You’ll likely pay Income Tax and Class 2 NICs on your earnings as a full-time self-employed locum GP.  

Once you’ve registered for Self Assessment (which tells HMRC that you’re self-employed or have additional taxable income to report), each year you must complete and file a Self Assessment tax return (SA100), detailing your income for the previous tax year, together with any reliefs and expenses you wish to claim. HMRC will then work out your tax bill.

Before you can complete your tax return, you must register for Self Assessment by 5 October after the previous tax year ends on 5 April – otherwise you could be fined. For a fee, an accountant can register for you.

Need to know!

• You must maintain accurate records of your income and expenses; otherwise you risk an HMRC fine. Using dedicated locum accounts software can keep things better organised and make completing your tax returns much quicker and easier.

What allowable expenses can locum GPs claim?

As a self-employed locum GP, you may be able to claim a range of allowable expenses. If created “wholly and exclusively” as a result of your locum GP work, HMRC allows you to deduct these from your earnings via your Self Assessment tax return, which reduces your yearly profits and tax bill.

Allowable expenses can include use of a home office, a mobile phone, broadband, insurance, professional memberships and subscriptions, training courses (CPD), conferences, work-related books and magazines and equipment (although sometimes you claim a capital allowance for equipment).

Where you use something for your self-employed work and personal reasons, for example, your mobile phone, you must calculate the business proportion of the total cost and claim only for this. You can’t claim pension contributions as an allowable expense, although they’re eligible for tax relief if paid to a registered pension scheme (seek tailored pension advice if necessary).

Can locum GPs claim mileage expenses?

For mileage expense purposes, your home will not be considered by HMRC as your normal place of business/work. That means you cannot claim mileage expenses for travelling to a GP surgery (or two) at which you’ll be working regularly, because this will be considered your normal place of business/work.

However, you can claim as (an allowable expense) for journeys from your home to several surgeries or places of work for various sessions or visits, where the travel pattern is random rather than regular. Obviously, you can’t also claim for mileage if your client practice covers such costs in their payment to you. If not, you can claim:

• 45p per business mile travelled in your car for the first 10,000 miles
• 25p per business mile thereafter or
• 24p a mile if you use your motorbike for business/work-related journeys.

If you use public transport (but not for journeys to a regular place of work), retain proof, as these costs too can be claimed as an allowable expense.

Need to know!

• Keep a detailed mileage log of your vehicle journeys, stating dates, locations and mileage travelled. It will act as proof and make things much easier when claiming mileage via Self Assessment.
• Read: What vehicle, travel, hotel and meal expenses can you claim when you’re self-employed.

Having to complete and file a Self Assessment tax return is a pain that many locum GPs can do without. We can help. GoSimpleTax offers you an easier way to complete and file your Self Assessment tax return. If you do want to do it yourself, why not get your Self Assessment tax return checked by one of our experts? It can ensure that your tax return is error-free and that you’re claiming all of your allowable expenses.

Blog content is for information purposes and over time may become outdated, although we do strive to keep it current. It's written to help you understand your Tax's and is not to be relied upon as professional accounting, tax and legal advice due to differences in everyone's circumstances. For additional help please contact our support team or HMRC.