Limited Companies for Locums

Can be a tax efficient choice

Structuring yourself as a limited company can be a very attractive business structure. In the right circumstances it is possible for a doctor to achieve savings by:

• Splitting their income with a spouse or civil partner.
• Arranging for income to be taxed at 20% rather than the higher 40% or 45% tax rates.
• Reduce National Insurance Contributions.

However, as a locum doctor working through your own limited company, you need to consider whether the IR35 regulations / ‘’off payroll’’ working rules apply to you.

‘Off Payroll’ Working Rules (IR35)

Since these were introduced in 2017 it is now very likely that if you work through a limited company your employer will pay you subject to PAYE, with tax deducted at source. This means it is often now far less tax efficient to work through a limited company.

Agencies

Agencies are now often obliged to operate the ‘off payroll’ working rules. In effect this means that a locum will very often be subject to PAYE on any work completed through an agency.

Helping you make the right choice

Whether or not a limited company is the right business structure for a locum doctor depends upon the doctors individual financial and personal circumstances.

We are very experienced in looking at your circumstances and determining the best business structure for you as a doctor.

We can then advise you on the best business structure will keep your tax to a minimum.