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.

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Working with Locum Agencies

Many of our locum doctors are paid through locum agencies. Many are paid directly by the end user.

Self employment

Until the 1990s locum agencies were happy to engage locums on a self employed basis. The locums were paid gross without deduction of any tax or national insurance.

HMRC then brought in a rule which made the locum agencies responsible for unpaid tax if they engaged locums on this basis.

This is why locum agencies are very reluctant to allow locums to operate as self employed contractors.

PAYE Salary

Agencies are happy to pay locums under a PAYE salary. Provided the locum agency operates PAYE properly, they will not be held liable for the locum’s unpaid tax or national insurance.

Limited Companies

An agency can pay a personal service company gross and will not be liable for the locum’s unpaid tax or national insurance. The agency has no responsibility to advise the locum whether or not IR35 legislation is applicable to a particular contract. This is entirely the responsibility of the locum who will also be the director of the personal service company. Since the introduction of ‘off payroll’ ruling most limited companies quoting through agencies will be paid through PAYE.

Umbrella Companies

An agency can pay an umbrella company gross and will not be liable for the locum’s unpaid tax or national insurance. Most umbrella companies operate as if IR35 applies to all locum contracts. This is nearly always the case since the introduction of the ‘off payroll’ working rules in 2017.

Most agencies are happy to pay locums by salary through a personal service company or through an umbrella company. The agencies have no responsibility to advise the locum as to their tax and national insurance responsibilities in these circumstances.

Most agencies will not employ a locum at all on a self employed basis.

Choose where best to get your tax advice

Locum agencies are not tax advisers, they are keen to promote their services. We recommend you take tax advice from a qualified professional. We recommend you do not take tax advice from a locum agency. Always obtain tax advice in writing.

How we can help

We will give you written professional advice regarding your tax and national insurance situation.

We will advise which is the best option for you.


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.



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.

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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.

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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.


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.