Working as a locum GP provides medical professionals with a dynamic and flexible career path. In the UK, there are over 17,000 locum GPs who fill in temporarily for permanent GPs in practices across the country. This career model is particularly appealing to those seeking greater autonomy, a varied work environment, or a better work-life balance. Locum work offers GPs the chance to sample different practices and regions before committing to a long-term position. Additionally, many salaried GPs take on occasional locum work to supplement their income.
Embracing Self-Employment
Choosing to become a locum GP is more than a career decision; it is also a step into self-employment. Most locum GPs operate as self-employed professionals, managing their own workload, income, and business responsibilities. While some may choose to form a private limited company, the majority function as sole traders.
Being self-employed means you are not employed by the NHS, a GP practice, or a recruitment agency. Instead, you work for yourself, negotiating your own contracts, setting your own fees, and maintaining your own financial records. This setup offers independence and control but also comes with legal and financial responsibilities.
Setting Up as a Self-Employed Locum GP
To begin working as a locum GP, you must inform HM Revenue & Customs that you are self-employed. This is done by registering for Self Assessment, which is the system used by HMRC to collect Income Tax and National Insurance from self-employed individuals.
The registration must be completed by 5 October following the end of the tax year in which you started working as a locum GP. The UK tax year runs from 6 April to 5 April the following year. If you started locum work in May 2024, for example, you must register by 5 October 2025. Missing this deadline can lead to penalties.
Managing Your Income
As a self-employed locum GP, you will typically be paid directly by the GP practice or service provider you work for. You must issue invoices for the work you complete, detailing the dates and hours worked, the agreed rate, and any additional charges. Payments are made directly to your bank account.
You are responsible for keeping track of all income received. This includes maintaining records of invoices, receipts, bank statements, and any correspondence related to payments. Whether you use spreadsheets or accounting software, your records must be accurate and up to date to meet HMRC requirements.
Navigating the Self Assessment Tax Return
Every year, you must file a Self Assessment tax return using the SA100 form. This form reports your income, allowable expenses, and any tax reliefs you are claiming. HMRC will use the information you provide to calculate your tax bill.
The tax return must be submitted by 31 January following the end of the tax year. For instance, for the 2024–25 tax year (ending 5 April 2025), the deadline for online submission is 31 January 2026. Paper tax returns must be filed earlier, by 31 October 2025.
The tax you pay will depend on your total income and allowable deductions. As a self-employed individual, you may need to make payments on account—advance payments towards your next year’s tax bill. These are due in two installments: one by 31 January and the second by 31 July.
Paying National Insurance Contributions
Self-employed locum GPs must also pay National Insurance contributions. These are usually Class 2 and Class 4 contributions.
Class 2 contributions are a flat weekly rate, while Class 4 contributions are calculated as a percentage of your profits. Both types of NICs are calculated and collected through the Self Assessment system.
Keeping Accurate Financial Records
Maintaining accurate and detailed financial records is essential. You must keep evidence of all income, expenses, and any tax-related documents for at least six years. This includes invoices, bank statements, mileage logs, and receipts for business expenses.
Effective record-keeping not only ensures compliance with tax regulations but also helps you monitor your business performance and profitability.
Budgeting for Tax Liabilities
Unlike salaried employees, self-employed locum GPs must budget for their own tax payments. Since taxes are not deducted at source, it is wise to set aside a portion of your earnings each month to cover your tax bill.
Many professionals recommend reserving 25 to 30 percent of your gross income to cover Income Tax and National Insurance. Setting up a separate savings account for tax liabilities can help ensure you are prepared when payment deadlines arrive.
Professional Support and Resources
While some locum GPs manage their finances independently, many choose to work with an accountant who specialises in medical professionals. An experienced accountant can help you optimize your tax return, ensure compliance with HMRC rules, and provide guidance on pensions and other financial planning matters.
Using digital tools or dedicated accounting software can also streamline your financial management. These tools often include features such as invoice generation, expense tracking, and automated tax calculations.
Organising Your Schedule and Contracts
As a self-employed professional, you are responsible for managing your own diary, arranging work sessions, and negotiating terms. Locum GPs must coordinate with practices to schedule their work and confirm the details of each session, including the rate of pay, hours, and responsibilities.
Clear and consistent communication with the practices you work with is key to avoiding misunderstandings. It is also important to confirm whether travel costs or any other expenses are reimbursed by the practice.
Understanding Insurance Requirements
All practising GPs are required to have professional indemnity insurance. As a locum GP, you must arrange this coverage yourself. It protects you against claims of clinical negligence and covers legal fees and compensation.
You may also consider additional types of insurance, such as income protection insurance, which provides a safety net in case you are unable to work due to illness or injury.
Managing Professional Memberships and Development
Maintaining your registration and professional knowledge is a crucial part of your role. Membership fees to professional organisations such as the General Medical Council, the British Medical Association, and Royal Colleges are typically considered essential.
You are also responsible for managing your own continuing professional development. This includes attending CPD courses, training sessions, and medical conferences. These costs are necessary to keep your skills up to date and remain compliant with professional standards.
Gaining Experience and Exploring Opportunities
Locum work gives you the chance to explore different types of practices, patient populations, and working environments. Whether you are a newly qualified GP or an experienced practitioner seeking a change, locum work can offer valuable experience and insight.
Some locum GPs use this flexibility to find a practice they enjoy before committing to a permanent role. Others choose locum work as a long-term career path that fits their lifestyle and goals. The variety and freedom can be a powerful draw, especially for those who value independence and diversity in their work.
Developing a Long-Term Career Strategy
While the day-to-day work of a locum GP may be varied and flexible, it is still important to think about your long-term career goals. Whether you are working full-time as a locum or combining it with part-time salaried work, consider your financial future and professional development.
This includes planning for retirement, considering investment options, and ensuring that you continue to meet your personal and professional objectives. Working with a financial advisor or career mentor can help you stay on track and make informed decisions.
Staying informed and proactive in managing your locum GP career can provide both professional fulfilment and financial stability. In the next section, we will explore how to claim allowable expenses and reduce your tax liability effectively.
Importance of Financial Planning
Being self-employed brings freedom and flexibility, but it also requires a disciplined approach to managing your finances. Unlike salaried employment, there are no automatic pension contributions, sick pay, or tax deductions. Every self-employed locum GP must actively manage their income, expenses, savings, and investments to maintain financial stability.
A good financial plan allows you to track your income streams, manage your costs, and plan for the future. This includes saving for taxes, building an emergency fund, contributing to a pension, and setting aside funds for holidays, illness, or quiet work periods.
Building a Reliable Invoicing Process
Locum GPs are typically paid directly by the practices or services they work with. To get paid efficiently, you must develop a consistent invoicing routine. Each invoice should include essential details such as:
- Your name and contact details
- The name and address of the practice
- The date of the invoice
- The dates and times worked
- Your rate per session or hour
- The total amount due
- Payment terms and bank account details
Ensure invoices are sent promptly after each session or at an agreed interval. Follow up on any delayed payments professionally. Tracking your invoices will help you avoid missing income and make it easier to calculate your earnings at year-end.
Recording Income and Expenses
Accurate record-keeping is essential for tax compliance and business management. Keep a record of every payment you receive, supported by invoices or remittance advice. Similarly, you must maintain detailed records of all business-related expenses. These should include:
- Receipts
- Invoices
- Bank statements
- Contracts
- Mileage logs
- Digital copies where applicable
Using accounting software can help simplify this process, but even a detailed spreadsheet can suffice if maintained regularly. Keeping everything organised ensures you can calculate your profits accurately and back up your claims if audited by HMRC.
Understanding Allowable Expenses
Allowable expenses are costs that are incurred wholly and exclusively for your locum work. These expenses can be deducted from your gross income, reducing the amount of tax you owe. To claim an expense, you must be able to demonstrate that it was necessary for your professional activities.
Common allowable expenses for locum GPs include:
- Professional indemnity insurance
- Medical equipment and tools
- Laptop or tablet for work use
- Stationery and printing costs
- Home office expenses
- Phone and internet (proportional use for work)
- CPD courses and medical conferences
- Professional subscriptions and membership fees
- Work-related travel expenses (excluding travel to a regular place of work)
Claiming Home Office Expenses
If you do some of your locum GP work from home, such as preparing notes, managing bookings, or completing administrative tasks, you may be eligible to claim a portion of your home running costs. These might include:
- Heating and electricity
- Council tax
- Mortgage interest or rent
- Water rates
- Broadband and phone
There are two methods to calculate your home office claim:
- Flat Rate Method – HMRC provides simplified expenses based on the number of hours you work from home each month. This is easier to calculate and does not require receipts.
- Actual Cost Method – You calculate the proportion of home costs attributable to your work, based on the number of rooms and the amount of time used for business. This can result in a higher claim but requires detailed records and calculations.
Choose the method that works best for your circumstances. Whichever method you use, retain documentation to support your claim.
Managing Mobile and Broadband Costs
If you use your mobile phone or broadband connection for work, you can claim a proportion of these costs. For instance, if 60 percent of your phone usage is work-related, then 60 percent of your mobile phone bill may be considered an allowable expense.
It is important to make a reasonable estimate and keep a record of how you arrived at the percentage claimed. Avoid claiming the full amount unless you have a separate phone or internet service exclusively for business use.
Equipment and Capital Allowances
Some items used in your locum GP work may qualify for capital allowances. These are generally higher-cost items expected to be used for more than one year, such as a new laptop, tablet, or medical equipment. You may be able to claim the full cost in the year of purchase through the Annual Investment Allowance.
Ensure that the equipment is primarily for work purposes. If it is used partly for personal use, only the business portion can be claimed.
Training and Professional Development
Locum GPs are responsible for maintaining their own professional standards, including continuing professional development. You can claim expenses for CPD courses, medical conferences, and clinical skills updates if they relate directly to your role as a GP.
Accommodation and travel costs associated with CPD events can also be claimed if you are required to stay overnight. Keep all receipts and ensure the purpose of the trip is clearly documented.
Subscriptions and Memberships
Most self-employed GPs belong to professional bodies and associations. Subscriptions to organisations like the General Medical Council, British Medical Association, Royal Colleges, and medical defence unions are usually considered essential and can be claimed.
Be cautious with subscriptions to non-professional or personal interest groups, as these are not allowable.
Travel and Mileage Claims
Travel expenses are one of the most misunderstood areas for locum GPs. HMRC rules are strict about what constitutes a legitimate travel expense.
If you travel to different locations on a non-regular basis, these journeys are considered business-related. In these cases, you can claim mileage at HMRC-approved rates:
- 45p per mile for the first 10,000 miles in a tax year (car)
- 25p per mile beyond 10,000 miles (car)
- 24p per mile if using a motorbike
You cannot claim mileage for travel to a regular or long-term workplace. For example, if you work two days a week at the same GP practice, this is seen as a regular commute and is not claimable.
Public transport, parking fees, and tolls can also be claimed for work-related journeys. Retain all tickets and receipts as evidence.
Keeping a Mileage Log
To claim mileage expenses, you must keep a detailed mileage log. This log should include:
- Date of travel
- Starting point and destination
- Purpose of the journey
- Miles travelled
Some apps can automate mileage tracking, or you can use a paper logbook. Make sure the information is accurate and consistent.
Meals and Accommodation
If your work requires you to travel and stay overnight, you can claim the cost of reasonable accommodation and meals. However, day-to-day meals and snacks are not usually allowable unless they are part of an overnight stay or a business meeting.
Hotel costs, meal receipts, and incidental travel expenses should be retained and submitted with your expense records.
Managing Pensions and Savings
While pension contributions are not allowable business expenses, they still offer tax relief. Contributing to a registered pension scheme reduces your overall tax liability by extending your basic rate tax band.
As a self-employed individual, it is your responsibility to set up and contribute to a pension. Many locum GPs choose personal pensions or self-invested personal pensions (SIPPs). Speak to an independent financial adviser to find the best option for your needs.
Planning for VAT
Most locum GPs do not need to register for VAT, as medical services are generally exempt. However, if you provide non-medical services or consultancy work, these may be subject to VAT.
If your annual turnover exceeds the VAT threshold, currently set by HMRC, you may be required to register. Understand the rules that apply to your specific services and keep an eye on your earnings to avoid unexpected obligations.
Setting Up a Business Bank Account
Although not a legal requirement, having a separate business bank account can simplify your financial record-keeping. It allows you to separate personal and business finances, making it easier to track income, manage expenses, and prepare your tax return.
Choose a bank account that offers features useful to self-employed professionals, such as integration with accounting software, mobile banking, and minimal fees.
Monitoring Profitability and Cash Flow
Running your locum GP work like a business means regularly reviewing your financial performance. Monitor your cash flow to ensure you have enough funds to cover expenses, taxes, and savings goals.
Evaluate your profitability by comparing income to costs, and identify any trends that could affect your financial stability. Cash flow planning is especially important during quieter periods, such as holidays or seasonal slowdowns. Creating a cash buffer helps you manage these times without stress.
Planning Ahead for Quiet Periods
Locum work can be unpredictable. Some months may be extremely busy, while others are quieter. Planning ahead by building a financial cushion can protect your finances during low-income periods.
Saving a percentage of your monthly earnings and forecasting your income and expenses over a 6- or 12-month horizon can give you more control and confidence in your financial decisions.
Staying Compliant with HMRC
Tax compliance is a critical responsibility. Avoid common mistakes such as missing deadlines, underreporting income, or claiming ineligible expenses. Keep all supporting documents, file returns on time, and pay any taxes due before the deadlines.
Working with a qualified accountant or using reliable digital tools can help reduce the risk of errors and ensure you are always compliant.
Understanding the Self Assessment Process
Self Assessment is HMRC’s method for collecting income tax and National Insurance contributions from individuals with income not taxed at source. For locum GPs, this means declaring all income earned through freelance or self-employed work. The system allows you to report your earnings, claim allowable expenses, and calculate your tax liability.
Each tax year runs from 6 April to 5 April the following year. If you began working as a locum GP, you must register for Self Assessment by 5 October after the end of your first tax year. Once registered, you are responsible for submitting your tax return and paying any tax due.
Registering for Self Assessment
If you haven’t registered before, you must do so through HMRC’s website. You will be issued a Unique Taxpayer Reference (UTR), which is required each time you file your return. Registration can take a few weeks, so it’s best to do it early.
Once registered, you will receive login credentials for HMRC’s online services. From there, you can file your tax return digitally, view your tax calculations, make payments, and manage correspondence.
Information Needed to Complete Your Return
Before you start filling in your Self Assessment tax return, gather all necessary documents and records. This includes:
- Invoices issued to GP practices or clients
- Bank statements showing incoming payments
- Receipts for allowable expenses
- Details of mileage and travel logs
- Professional subscriptions and indemnity insurance
- Pension contributions (for tax relief purposes)
- Any other income received, such as interest or rental income
Having all relevant paperwork available will streamline the process and ensure accurate reporting.
Filling Out the Tax Return (SA100)
The main Self Assessment tax return form is SA100. If you are self-employed, you will also need to complete the Self-Employment Supplement (SA103S or SA103F depending on your turnover).
On the form, you will:
- Report your total self-employed income
- Declare any other income such as dividends or savings
- Detail your allowable business expenses
- Report pension contributions for tax relief
- Calculate your taxable profits
- Confirm any tax you have already paid
Once complete, you will be shown an estimated tax bill. This figure includes Income Tax and Class 2 and Class 4 National Insurance contributions.
Submitting Your Return
The deadline for submitting a paper return is 31 October after the end of the tax year. For online submissions, the deadline is 31 January of the following year. Missing these deadlines can result in penalties, starting with a fixed £100 fine.
File early if possible. This not only reduces the risk of missing deadlines but also gives you more time to budget for any tax payment due.
Making Payments
If your tax bill is more than £1,000, you may need to make payments on account. These are advance payments towards your next year’s tax bill, made in two instalments:
- 31 January (same day your current year’s tax is due)
- 31 July
Each installment is usually half your previous year’s tax bill. If your income drops significantly, you can apply to reduce your payments on account.
Payments can be made online via bank transfer, debit card, or through a direct debit arrangement. HMRC will provide all necessary payment details when you file your return.
National Insurance Contributions
As a self-employed individual, you are responsible for paying:
- Class 2 NICs: A flat weekly rate, due if your profits exceed the Small Profits Threshold
- Class 4 NICs: A percentage of your profits above the Lower Profits Limit
These contributions count towards your State Pension and access to certain state benefits.
Class 2 and Class 4 contributions are calculated automatically when you file your Self Assessment tax return.
Reducing Your Tax Bill Legally
There are several ways to reduce your tax liability while remaining compliant with HMRC regulations. Key strategies include:
- Claiming all allowable expenses
- Making pension contributions for tax relief
- Using the Marriage Allowance if eligible
- Taking advantage of trading and savings allowances
- Investing in tax-efficient accounts such as ISAs
You should review these strategies annually to see which ones apply to your financial situation.
Claiming Tax Relief on Pension Contributions
Although pension contributions are not considered allowable expenses, they do attract tax relief. This means that contributions to a registered pension scheme will increase your basic rate tax band, reducing your overall tax liability.
You must report your personal pension contributions on your tax return to receive this relief. The amount of tax relief depends on your total income and the level of your contributions.
Trading Allowance for Low-Cost Income Streams
If you have minor sources of self-employment income outside your main locum GP work—for example, giving talks or writing medical content—you may be eligible to claim the trading allowance.
This allows you to earn up to a set limit tax-free, without needing to report related expenses. If your earnings are above the threshold, you can choose whether to deduct actual expenses or claim the allowance.
Understanding Capital Allowances
Capital allowances allow you to deduct the cost of significant business assets such as medical equipment or computers from your taxable profits.
The Annual Investment Allowance enables most small businesses to claim 100% of qualifying costs in the year of purchase. Keep all receipts and documentation to support your claims, and ensure the items are used primarily for business purposes.
Role of Accounting Software
Digital tools can make it much easier to track income, monitor expenses, and prepare your Self Assessment tax return. Good software will automate calculations, generate invoices, and even alert you to upcoming deadlines.
Look for platforms tailored to self-employed professionals, and ensure any system you choose is compliant with Making Tax Digital (MTD) if applicable in the future.
Engaging with a Qualified Accountant
Although many locum GPs manage their taxes independently, others find value in hiring an accountant. A qualified accountant can:
- Ensure accurate tax reporting
- Identify additional allowable expenses
- Reduce your risk of penalties
- Offer proactive financial planning
Working with an accountant may be especially helpful in your first few years or during significant changes in income or working structure.
Keeping Financial Records
HMRC requires you to keep detailed records of income and expenses for at least five years after the 31 January filing deadline. This applies whether you file your return yourself or use an accountant.
Examples of records to keep include:
- Invoices and receipts
- Bank statements
- Mileage logs
- Equipment purchase documentation
- Insurance and membership documents
These records will support your tax return and serve as evidence in the event of a tax audit.
Budgeting for Tax Payments
Tax payments can be substantial, especially with payments on account. One of the most effective strategies is to set aside a percentage of your income each month into a separate tax savings account.
Many locum GPs allocate between 25% to 35% of their income for tax. This ensures you’re prepared when payments are due and reduces financial stress.
Adapting to Changes in Tax Regulations
Tax rules can change from year to year, particularly regarding thresholds, allowances, and reporting requirements. It’s essential to stay informed about any updates that could affect your responsibilities as a locum GP.
Subscribe to trusted tax news sources or consult a tax adviser periodically to ensure your financial strategies remain compliant and effective.
Planning Ahead for Retirement
As a self-employed professional, retirement planning falls entirely under your control. Make regular pension contributions, even if they start small, and increase them as your income grows.
You can also explore retirement savings options beyond traditional pensions, such as:
- Lifetime ISAs
- Investment portfolios
- Property investments
Starting early and contributing consistently will help you build a secure financial future.
Planning for Irregular Income
Locum income can fluctuate depending on demand, season, and personal availability. Create a flexible budget that accounts for high and low earning months.
Track income trends throughout the year and adjust your spending accordingly. During high-income periods, set aside additional savings to cushion slower months.
Reviewing Your Financial Position Annually
Each year, take time to review your financial health. Evaluate your income growth, expense levels, savings rates, and tax payments. Reflect on whether you’re on track with your goals or whether adjustments are needed.
This is also a good time to review your insurance coverage, pension strategy, and any changes to tax legislation that may affect you.
Knowing When to Consider Incorporation
Some locum GPs consider forming a limited company for their work. While this can provide tax advantages in certain situations, it also introduces additional responsibilities and administrative work.
Key factors to consider include:
- Whether your income exceeds the threshold where incorporation becomes beneficial
- Your long-term career plans
- The level of administrative support you have
Seek independent advice before making this transition.
Protecting Yourself with Insurance
Professional indemnity insurance is essential for all locum GPs. You should also consider other policies that offer financial protection, including:
- Income protection insurance
- Critical illness cover
- Public liability insurance
Having adequate insurance coverage ensures you are protected from unforeseen circumstances that may disrupt your ability to work.
Navigating Financial Responsibilities with Confidence
Successfully managing your tax and financial affairs as a locum GP comes down to preparation, awareness, and discipline. Keeping detailed records, understanding allowable expenses, submitting tax returns on time, and saving consistently can make your self-employed career financially rewarding and secure.
Regularly revisiting your financial strategy helps you adapt to changes in your work patterns, income levels, and tax rules. With the right systems in place, you can navigate your responsibilities confidently and focus on delivering excellent patient care.
Conclusion
Working as a locum GP offers a rewarding blend of professional flexibility, diverse experiences, and potentially higher earnings compared to traditional salaried roles. However, with this independence comes the critical responsibility of managing your own finances, particularly in relation to income reporting, tax obligations, and expense claims.
Understanding what it means to be self-employed as a locum GP is the first step toward staying compliant with HMRC regulations. Whether you’re new to the locum lifestyle or expanding your income streams, registering for Self Assessment and maintaining accurate financial records are fundamental practices. These help you stay on top of your tax responsibilities, avoid penalties, and make the most of the opportunities available to reduce your taxable income legally.
Knowing which expenses are allowable, from professional subscriptions and CPD to mileage and home office use, can significantly ease your tax burden. At the same time, keeping detailed records and logs ensures that your claims remain valid and defensible in the event of a review.
Completing your tax return doesn’t need to be a daunting task if approached with preparation and consistency. By leveraging tools, setting aside tax savings regularly, and consulting professional advisers when needed, you can confidently navigate the complexities of self-employment. Taking time to understand pension tax relief, capital allowances, and the implications of fluctuating income enables better long-term planning and financial security.
As the demand for locum GPs continues to grow, mastering the financial aspects of your role will empower you to focus on delivering high-quality patient care, while ensuring your business and personal finances remain healthy and compliant.