Healthcare pays in more shapes than any other sector we work with. One client can have a substantive NHS post on PAYE, weekend locum shifts as self-employment, and agency work through an umbrella, all in the same tax year. Each piece is taxed differently, and the mess only shows up at return time.

The three buckets

  • Employment. Tax and NI taken at source, pension often involved. Nothing to do until year end, when it goes on your return alongside everything else
  • Self-employed locum work. Yours to declare, with expenses claimable against it. Over £50,000 of it and MTD quarterly updates now apply to you too
  • Agency and umbrella work. Usually taxed as employment by the umbrella. The payslips look strange, and checking them is genuinely worthwhile

What locums can claim against self-employed income

  • Professional registration: GMC, NMC, GPhC and the rest
  • Medical indemnity insurance
  • Royal college and union subscriptions on HMRC's approved list
  • Training and CPD, where it maintains existing skills rather than building new ones. The line is genuinely blurry and worth asking about case by case
  • Travel between temporary workplaces, though not ordinary commuting

The pension interaction

If you're in the NHS pension through one role while earning self-employed on the side, the interaction with annual allowance rules can get expensive at higher incomes. This is one of the few places where we'll say: get the sums done before you add more shifts, not after.

Should a locum go limited?

Sometimes. It depends on your mix of work, whether IR35 catches the agency side, and how much you need to draw. It's the same honest calculation we run for anyone, and the answer is no more often than the internet suggests.