UK Locum GP Tax Guide 2025/26: Self-Assessment, NI, and Take-Home Pay
Everything UK locum GPs need to know about tax in 2025/26. Covers Self Assessment registration, income tax bands, National Insurance classes, allowable expenses, and Ltd company vs sole trader.
Working as a locum GP gives you flexibility and often higher day rates — but it also means managing your own tax affairs. Here is what you need to know for the 2025/26 tax year.
Do I Need to Register for Self Assessment?
Yes. Any GP earning self-employed locum income must register with HMRC for Self Assessment. You need to register by 5 October following the end of the tax year in which you first started locum work.
Once registered, you submit a tax return each year by 31 January (online) covering income earned in the previous tax year (6 April to 5 April). Penalties for late filing start at £100 and increase over time.
2025/26 Income Tax Bands (England)
| Band | Rate | Income Range |
|---|---|---|
| Personal Allowance | 0% | Up to £12,570 |
| Basic Rate | 20% | £12,571 – £50,270 |
| Higher Rate | 40% | £50,271 – £125,140 |
| Additional Rate | 45% | Over £125,140 |
Important: Your Personal Allowance tapers away if your income exceeds £100,000. For every £2 over £100,000, you lose £1 of Personal Allowance — creating an effective 60% marginal rate between £100,000 and £125,140.
Scotland has its own income tax rates set by the Scottish Parliament. Welsh income tax mirrors English rates.
National Insurance for Self-Employed Locum GPs
Self-employed GPs pay two classes of National Insurance:
Class 2 NI — a flat rate of £3.45 per week if your profits exceed the Small Profits Threshold of £6,725. This is paid through your Self Assessment return.
Class 4 NI — calculated on profits:
- 9% on profits between £12,570 and £50,270
- 2% on profits above £50,270
This is considerably lower than employee NI (currently 8% up to the upper earnings limit, 2% above), making self-employed locum work tax-efficient for many doctors.
What Expenses Can I Claim?
Allowable expenses reduce your taxable profit. Common deductible expenses for locum GPs include:
- Travel costs — mileage to and from locum sessions at HMRC approved rates (currently 45p/mile for the first 10,000 miles)
- Medical indemnity insurance — MDU, MPS, MDDUS premiums
- Professional subscriptions — BMA, RCGP, GMC registration fees
- Medical equipment and consumables — stethoscopes, diagnostic equipment used professionally
- CPD and training — course fees, conference attendance directly related to your work
- Accountancy fees — your accountant’s fees for preparing your tax return
- Home office costs — a proportion of home broadband, phone, and utility costs if you work from home
- Pension contributions — personal pension contributions can be deducted and attract tax relief at your marginal rate
Always keep receipts. HMRC can ask for evidence of expenses up to 4 years after the tax year in question (6 years for certain cases).
Self-Employed vs Ltd Company: Which Is Better?
Most locum GPs start as sole traders (self-employed) and graduate to a Ltd company as income grows. Here is how they compare:
Sole trader (self-employed)
- Simpler administration — file one Self Assessment return
- Pay Class 2 + Class 4 NI on all profits
- All profit is taxed as income in the year earned
- No separate company tax return required
Ltd company director
- Pay yourself a small salary (typically up to the NI Primary Threshold of ~£12,570)
- Take additional income as dividends — taxed at lower rates (8.75% basic, 33.75% higher)
- Potential to save thousands in NI per year at higher income levels
- Higher administration: company accounts, Corporation Tax return (19-25%), payroll, Companies House filings
- Additional accountancy costs (~£800–£2,000/year)
- IR35 risk if working through certain NHS frameworks
As a rule of thumb: Ltd company structures typically start saving meaningful tax once your locum income exceeds £50,000–£60,000 per year. Below that level, the admin overhead often outweighs the tax savings.
Pension Contributions: A Powerful Tax Lever
For higher-rate taxpayers, personal pension contributions are one of the most effective ways to reduce your tax bill. Basic-rate taxpayers effectively get 25% relief; higher-rate taxpayers get 67% relief (every £1 you contribute only costs you 60p after tax).
Locum GPs who opted out of the NHS Pension Scheme can make contributions to a personal SIPP (Self-Invested Personal Pension). The annual allowance is £60,000 (2025/26). You can also carry forward unused allowances from the previous three tax years.
Key Dates for 2025/26
| Date | What You Need to Do |
|---|---|
| 5 October 2025 | Register for Self Assessment if newly self-employed |
| 31 January 2026 | File your 2024/25 tax return online |
| 31 January 2026 | Pay any tax owed for 2024/25 plus first payment on account |
| 31 July 2026 | Second payment on account for 2025/26 |
Payments on account are advance payments of roughly half your previous year’s tax bill, made in January and July. Many locum GPs are caught out by these in their first year — plan ahead.
Getting Professional Help
Tax rules for locum doctors involve nuances that a general accountant may miss. Consider finding an accountant who specialises in locum or medical professionals — they will know about NHS pension implications, IR35, expenses specific to clinical practice, and the optimal salary/dividend structure if you run a Ltd company.
This guide is for general information only and does not constitute tax advice. Always consult a qualified accountant for your personal circumstances.