Specialist advice for Locum Doctors

Working as a Locum can give you flexibility and a varied work experience, but making sure you are being paid correctly and not storing up trouble with HMRC can be more difficult, which is where we can help.

Contact us today

Tax Deductible Expenses

Helping you keep your tax bill down

Tax law says that an expense is deductible for tax if it is incurred ‘wholly and exclusively for the purposes of the trade or profession’.

If an expense is incurred for more than one purpose, i.e. business as well as personal use, a deduction for any identifiable proportion of the expense which is incurred ‘wholly and exclusively for the purposes of the trade’ is allowable.

So, when can I claim a tax deduction?

We have set out some of the types of expenditure that may be allowable. It should not be seen as an exhaustive list. What is allowable depends on the facts in each case.

What you can claim will depend on how you are being paid:

Self employed

As a self employed locum, you are able to claim business expenses against your profits. This will reduce your tax bill.

Professional subscriptions

The subscription costs we help our clients claim a deduction for on a regular basis are: MDU, MPS, BMA, GMS, RCGP.

An annual subscription to a body shown in the list approved by HMRC is allowable where either the subscription is paid by a self-employed individual or paid by an employee, and the activities of the body are directly relevant to the self-employment or employment.

Use this link to access the full list http://www.hmrc.gov.uk/list3/

Motor expenses

Motor expenses can be claimed on a car which is used for business purposes. The expenses have to be apportioned so that only the percentage incurred ‘wholly and exclusively for the purposes of the trade’ are allowed.

Use of your home as your office

If you carry out work related to your locum activity from your home, you will be able to claim a tax deduction to cover the additional costs of working from home. There are several ways to claim. Some accountants use a fixed amount per week, while others calculate a claim using a percentage of the actual running costs of the home.

Many clients think that if they make this claim there will be a capital gains tax implication when they sell their home. This will not be the case as long as no part of the house is used exclusively for business purposes.

Other expenses

Many other types of expenses can be claimed by self employed locums. We provide our locum clients with detailed checklists and advice to ensure that all allowable expenses are claimed.

Salaried

If you are a salaried locum, the tax deductible expenses you may claim are generally restricted to professional fees and subscriptions and possibly training costs.

Umbrella company

If you work through an umbrella company, the company will advise you on what expenses are tax deductible. They will make this tax deduction claim on your behalf. The expenses claimed are usually very limited.

Limited company (personal service company)

Assuming IR35 does not apply to your limited company, the tax deductible expenses which can be claimed are similar to those listed below for self employed locums.

If IR35 applies to your limited company, the tax deductible expenses are very limited. If the ‘off payroll’ working rules are applied to your limited company no expenses can be claimed as a tax deduction.

Record keeping

Everyone finds keeping business records a chore. However, we find that compiling your business records as quickly as possible after the year end is the best way of making sure that a claim for tax deduction is accurate and as high as possible.

If you lose a business receipt, it may still be possible to make a claim for a tax deduction as you may have other evidence of the expense. However, it may be more difficult to justify a claim and may also mean that the expense is simply forgotten.

How we can help

We can advise clients on:

  • Which expenses are deductible for tax.
  • How to make the relevant claims.
  • What percentage of a cost can be claimed as a business expense.
l

Contact us for specialist medical accountancy services for Locums

If you’re looking to plan your finances for the future or trying to find an answer to a problem then get in touch today.

s

NHS PENSION REVIEW

Are you in danger of being hit with a huge tax bill on your pension growth? Our NHS Pension Review Service can provide an advance warning of impending pension issues.

Learn more →

U

TAX ENQUIRY PROTECTION

HMRC have increasingly got GPs in their sights and many Practices have been subject to lengthy tax investigations. Make sure you’re covered with our annual insurance scheme.

Learn more →

FREE

EXPERT CONSULTATION

Talk to one of our Medical Accounting Team for free. We can discuss your circumstances and how we can help you achieve better financial management, reduce your tax bills or plan for the future with a tailored fixed price plan.

Meet our team

We have a panel of subject experts and a team of professional accountancy support staff to make sure your specific needs are met reliably and cost effectively.

HOW WE CAN HELP

A specialist healthcare team to advise you
Call free for support at any time
Keep you up to date with the latest changes
No fuss, smooth process to change to us
Members of AISMA - Association of Independent Specialist Medical Accountants

What our clients say…

Dr Ravi Bansal, Locum GP

I’ve been with Nichols and Co for nearly 10 years with Debra being my accountant. I first contacted them when I received letters for tax arrears due to the wrong tax codes being applied during my hospital jobs.

Debra sorted this matter out and has always provided helpful and honest advice regarding tax matters. She has also helped my wife with her tax returns. I would definitely recommend their services for accounting matters with a special interest in helping doctors with their tax affairs. They are approachable, helpful and efficient.

Dr Jayran Mistry, Locum

Thank you for everything you at Nichols & Co have done for me with regard to my tax returns to date. I have always felt I am able to approach you with any question and that the answer is always helpful and thorough.

I am very grateful for how detailed, clear and efficient you are with tax returns and letters and for expediting things when needed. Every time I make contact with you I am met with polite staff and helpful advice and I have spoken with many of my friends about the service you provide and how good I think it is. I always recommend you. Thanks very much again, I really appreciate your hard work and help.