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Locum Doctors - Advantages and Disadvantages of going limited

You may also find our page on 'How to become a Locum Doctor' and 'Becoming a Locum Pharmacist' helpful.

Statistics show that nearly 50% - 80% of doctors in UK hospitals are locum doctors. With demand so high it is no surprise that locum doctors are one of the most profitable freelance professions around.

Advantages of being Locum:
The benefits of working as a locum doctor are easy to see:

  • Virtually guaranteed work due to the huge demand.
  • Freedom to work when and where you want.
  • Lucrative long or short-term locum opportunities from one-day to one-year.
  • Opportunities to expand your skills and experience.
  • Opportunities to try different places of work.
  • Higher rates of pay.
  • Oversea recruitment programmes.

Advantages of working locum through your own Limited Company:

  • Most tax efficient way of working.
  • Avoids the use of some rather unusual and creative tax schemes – which are never a good idea. Realistically if you live in the UK, work in the UK and get paid in the UK you’re going to have to pay tax in the UK. There are a host of alternatives but HM Revenue and Customs are clamping down on tax avoidance schemes so you'd do well to avoid them. Remember you and only you are liable for your taxes despite what anybody else tell you.
  • More tax planning opportunities and not much more work administration than working as a sole trader.

Typically working through your own Limited Company means your take home pay can be anywhere between 75% - 80% of your daily rate, an example of take home pay could be found below:

- Daily rate £200 take home between £150 - £160
- Daily rate £300 take home between £225 - £240
- Daily rate £400 take home between £300 - £320
- Daily rate £600 take home between £450 - £480

For a more examples of take home pay visit our Limited Company take home calculator page.

Being a director of your own limited company does come with a little more administration,
however, locums and other medical professionals tell us that after the flood of initial questions, the administration side of working through your own limited company only requires 15 – 20 minutes for month, providing that is you work with an experienced accountant.

To form a limited company visit our parent company SJD Accountancy: Limited Company Formation page.

Finding work
Due to the high demand for locums it shouldn’t really be an issue sourcing work. But before registering with an agency, you might find the questions below helpful.

  1. What NHS Hospital do you regularly supply locum doctors to?
  2. What are your general guidelines on locum pay rates?
  3. What are your payment procedures?
  4. What compliance practices does your company follow?
  5. Does your agency have any references from clients and locum doctors regarding your services?
  6. Please can you send me your company terms and condition?
  7. Do you offer a “preregistration form”? (This form is an agreement between the doctor and the recruitment agency detailing the doctors exact locum requirements).

We recommend dealing with only one agency (two maximum). Some people feel dealing with only one agency restricts their job options, however this means you will build a strong relationship with them ensuring they are looking for the best possible positions for you.

When do I charge VAT for my services?
Most locum doctors do not need to charge VAT for their services, however this does depend on your contract.

For example, if you are a Locum Doctor working for a hospital directly dealing with patience you would be exempt from VAT, basically you would not have to charge VAT for your services, meaning you income is entirely yours, no deductions made.

However if you are a locum doctor performing a HR/Office/Managerial advisor position, where you are not treating patients directly, you will need to charge standard VAT rate for your service.

Visit the HMRC website for a full breakdown on how VAT is applicable for Locum Doctors: Health Professional.

If you have any further questions on Locum Doctors or freelancing, please do not hesitate to contact Easy Accountancy on: 0500 234111 / 01442 275767 or email: for some free guidance or the option of appointing us as your accountant.

Why Clients Choose Easy Accountancy

Easy Accountancy offers a low cost, fixed fee accountancy package with all clients receiving their own dedicated, friendly, approachable accountant.

All of our accountants specialise in providing accountancy services to the self-employed, freelancers, sole traders, small to medium sized limited companies and private individuals. All accountants are employees of Easy Accountancy and we never outsource or offshore work.

Our low cost, all-inclusive fixed-fee accountancy service includes unlimited access to your own dedicated accountant throughout the year and covers all your business and personal tax affairs needs.

All our accountancy services include:
  - Unlimited access to your accountant
  - Ongoing advice on how to manage your business
  - Proactive tax advice throughout the year
  - Updates and reminders so you'll never miss a deadline
  - Free bookkeeping software

As a sole trader our fees start at just £30 + VAT a month, for this you receive the above plus:
  - Completion of your Self-Assessment tax return
  - Advice on how much Income Tax to pay
  - Guidance on National Insurance contributions

As a limited company our fixed fee packages are bespoke to your needs, however typically you’ll receive the above, plus:
  - Completion of your year end accounts*
  - Completion and submission of your annual return Companies House
  - The director/s Self Assessment tax return
  - Payroll bureau
  - Dividends and corporation tax computations

We’ve saved our clients up to half on their accountancy bills – if you’d like a quote, click on the quote me button to the right of this page. Alternatively, call us on 0500 234111 / 01442 275767 or email

*If you would like us to complete your company year end accounts we simply ask that you have been a client of Easy Accountancy for one year or have made 12 monthly payments.