Helping Our Members Understand Locum Doctor Tax in 2025

At The Doctors Club, supporting our members goes beyond clinical conversations – we also aim to provide clarity on key professional matters, including the often-complicated world of tax. For our locum members especially, understanding the latest HMRC rules, your tax obligations, and how to make the most of allowable deductions can have a real impact on your finances.

To help, we’ve worked with the team at Nichols Medical Accountants, a firm that specialises in accounting for medical professionals. They’ve shared their insights to guide you through the key tax considerations for the 2025/26 tax year.

And if you want more tailored help, you can visit their dedicated page for our members here:
👉 nicholsmedical.co.uk/thedoctorsclub

Why Employment Structure Matters

Your tax position as a locum doctor depends on how you’re contracted:

• Employed Locum – If you’re working through an agency or directly for the NHS, you’ll be taxed at source through PAYE. This is straightforward, but you may still want to check your tax code and ensure your deductions are correct.
• Self-Employed Locum – You’re responsible for your own Self-Assessment tax returns and National Insurance contributions. This also means you can claim allowable expenses, which can significantly reduce your tax bill – but you’ll need to keep good records.
• Locum via Limited Company – Some doctors trade through their own limited company. While this route can offer tax efficiencies, it also brings additional responsibilities – including Corporation Tax, managing salary and dividends, and understanding IR35.

If you’re unsure which model is best for your situation, Nichols Medical Accountants offer practical, tailored guidance for locums.
👉 Explore your options

Key Tax Factors for 2025

Here are some of the major things to keep in mind:

• Personal Allowance: This remains at £12,570 for the 2025/26 tax year. Anything above this will be taxed according to the standard tax bands (20%, 40%, or 45%).
• IR35 Legislation: If you’re working through a limited company, IR35 rules still apply. If HMRC deems your contract to be “inside IR35,” you may face increased tax and NICs – so having your contracts reviewed is a smart move.
• Claimable Expenses: Self-employed locums or company directors can typically claim for:
• GMC and other registration fees
• Professional indemnity insurance
• Travel between sites
• CPD and training (if directly relevant to your clinical work)
• Equipment and medical supplies

Nichols Medical Accountants can advise you on what’s reasonable and HMRC-compliant – and help you build a system that tracks it all efficiently.

Quick Tips to Stay Tax-Savvy

✅ Use a separate business account to make bookkeeping easier
✅ Keep digital records of all your expenses and mileage
✅ Set calendar reminders for HMRC deadlines – especially 31 January
✅ Don’t leave your Self-Assessment until the last minute
✅ Speak to someone who understands the unique tax profile of doctors

Need Help? Access Support Built for Doctors

If you’re feeling unsure or want to improve how you’re managing your income and tax position as a locum, we recommend checking out the dedicated page Nichols Medical Accountants have created for our members:

👉 nicholsmedical.co.uk/thedoctorsclub

They offer:

• A free initial consultation
• Tailored advice for self-employed and limited company locums
• Help with IR35, tax planning, and expense tracking
• A specialist understanding of how doctors work

This article is provided by The Doctors Club for informational purposes only. We encourage members to consult a qualified accountant or advisor before taking financial decisions.