Accountant for NHS and Healthcare Locums
Locum work through the NHS comes with tax rules that do not match a typical self-employed or limited company setup, and a lot of the advice aimed at contractors in other industries simply does not apply to you. Before you pick an accountant, it helps to understand why your situation is different, because that shapes what a good accountant should actually be doing for you.
Why NHS locum work isn't taxed like other self-employment
Since April 2017, NHS trusts and other public sector bodies have had to assess whether each locum engagement falls inside or outside the off-payroll working rules (IR35). Most NHS shifts get assessed as inside IR35, which means tax and National Insurance are deducted before you're paid, usually by the agency or umbrella company you're working through.
That is different from private sector contracting, where you might run your own limited company and manage your own tax position. For a lot of NHS locums, the structure decision is effectively made for you by the trust, and it changes what an accountant can realistically do for you.
Limited company or umbrella: what actually fits
If most of your income comes from inside-IR35 NHS shifts, a limited company often adds cost and admin without much tax benefit, because you are taxed close to source either way. Many locums are better off on umbrella payroll for that part of their income.
A limited company starts to make more sense once you have income that sits outside the NHS engagement: private clinic work, telemedicine, medico-legal reports, expert witness fees, or teaching and training. A good accountant looks at the actual mix of your income before recommending a structure, rather than applying the same answer to every locum.
Expenses locums often get wrong
GMC or NMC registration, medical indemnity cover, royal college and professional body subscriptions, and CPD courses are generally allowable costs, but how you claim them depends on whether you are PAYE, on umbrella payroll, or running a limited company.
Travel is the one that catches people out. If you are working through an umbrella and the placement is treated as under the right of supervision, direction or control, home-to-placement travel usually cannot be claimed tax free, even though it feels like a legitimate work cost. This rule, in place since April 2016, trips up a lot of locums who assume travel between hospitals works the same way it used to.
What to look for in an accountant for locum work
Ask whether they have actually worked with NHS or agency-paid healthcare locums before, not just contractors in general. IR35 status determinations, umbrella payslip structures, and mixed PAYE plus self-employment income on a tax return are specific enough that general contractor experience does not automatically transfer.
Check they are regulated, for example by ICAEW or ACCA, so you have a route for complaints and a baseline of professional standards. And ask them directly how they would treat VAT for your particular mix of NHS and private work. VAT on agency-supplied medical services is complex and has been the subject of ongoing tax tribunal litigation, so a confident one-line answer without asking about your setup is worth being cautious of.
Frequently asked questions
Do I need a limited company for NHS locum shifts, or is an umbrella enough?
For most locums, if the bulk of your income is inside-IR35 NHS shifts, an umbrella company is simpler and does not cost you much extra tax, because you are taxed close to source either way. A limited company becomes worth considering once a meaningful share of your income comes from private, non-NHS, or otherwise outside-IR35 work.
What expenses can NHS locums actually claim?
GMC or NMC fees, indemnity insurance, professional body subscriptions and CPD courses are generally allowable, but how you claim them depends on your structure. Travel between placements is the one to check carefully: if you are on umbrella payroll and the engagement is treated as under supervision, direction or control, home-to-placement travel usually cannot be claimed tax free.
Do locums need to worry about VAT?
Most individual locums do not, either because their income sits below the VAT registration threshold or because medical services carry specific exemptions. Where agency structures or mixed private and NHS income are involved, the VAT treatment gets genuinely complex and has been through ongoing tax tribunal litigation, so it is worth asking your accountant to look at your specific setup rather than assuming a blanket answer either way.