Becoming a Limited Company Locum Doctor

Working as a locum for private hospitals

There are no specific regulations required to locum for a private hospital, although specialised doctors and consultants tend to be more in demand. To find locum work in private hospitals there are many recruitment agencies which advertise positions, such as:

• Coyle Medical, who provide roles in private hospitals for qualified professionals that have worked in UK hospitals for at least two years. Positions are available at all levels from Junior House Officers to Consultants.
• Merco has vacancies for short and long-term positions in private hospitals. The majority of the roles available are for Resident Medical Officers, Trauma Doctors and Consultants.
• MedicsPro is a medical recruitment agency that supplies locum doctors, nurses and radiographers to private healthcare providers across the UK, as well as to the NHS.

Returning to work for the NHS?

In response to the coronavirus crisis, the NHS has asked up to 50,000 of doctors and nurses to return to the frontlines. If you have previously worked as a locum doctor or nurse within the last three years and are considering returning to work, you will be asked to register with a regulatory body.

In light of these numbers returning to the NHS, HMRC has published guidance as tax avoidance schemes are attempting to target medical workers returning to work.

What do these tax avoidance schemes look like?

In their Spotlight 54 guidance, HMRC outlined a number of features which these schemes seem to share:

• the first payment is declared as earnings and will go through the umbrella company payroll, often at around National Minimum Wage levels or a flat rate payment for example, £100 per week
• the second payment, that the umbrella company will claim is not taxable - this payment may be described as a loan, annuity, shares, a capital advance involving mutual, joint or co-ownership, or a payment derived from a revolving line of credit facility, or some other non-taxable form
• The company might offer vague explanations about how the schemes work and claim that your take home pay could be up to 80-85%
• The payslips may be misleading and show the first payment only or inaccurate deductions

How can I protect myself against tax avoidance schemes?

HMRC have also offered a number of ways to check if you’re being offered this scheme:

• check how much tax you would normally have to pay on your income by using HMRC’s online tax calculator
• ask the person who is offering you the arrangement for a breakdown of the deductions being made so you can see exactly what you’re paying
• compare the figures to see if the scheme you have been offered is legitimate and compliant

If you’re thinking of working under an umbrella company, the easiest way to protect yourself is by using a compliant employment solution. As a founding member of APSCo and a board member of FCSA, Caroola’s sister company, Parasol are regulated by the highest industry standards. This means that you will always be protected by a company who values compliance above all else.

Find out more about how the joining process works and what’s on offer with Parasol.

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We've been providing expert accountancy advice and helping contractors to focus on doing what they do best since 1992.

Finding work as a locum GP

There are substantial opportunities for locum GPs to fill in for doctors on sick leave or on longer contracts to cover sabbatical or maternity leave.

Naturally, if you would like to work as a locum GP the best place to start is by contacting local medical centres and doctors’ surgeries to let them know that you are available. Specialist job boards such as GP Jobs may also be a useful place to begin.

Another way to find work as a locum GP would be to attend sessional GP groups for networking opportunities. These groups are usually regional and could also provide advice and information on industry knowledge and the latest industry news.

Specialist recruitment agencies

For help finding locum work in your area you may find the specialist recruitment agencies below useful:

• Medacs - locum doctor and specialist medical recruiters has over 20 years’ experience providing temporary and locum medical staff. They specialise in all types of medical recruitment, from NHS positions to prison healthcare.
• Agenda Recruitment Medical Locums are specialists in placing skilled medical professionals in both public and private locum healthcare positions across the UK.
• ID Medical was established in 2002 and provides medical locum staff to NHS and private sectors throughout the UK.
• A&E Agency specialises in recruitment for Accident and Emergency departments in NHS, prison services and private sector establishments nationwide.

Moving from permanent to locum - limited company or umbrella company?

As a locum doctor, you have the choice of working as director of your own limited company or through an umbrella company.

If you were to work through an umbrella company you would effectively be an employee of that company as they are responsible for taking the salary from your client and paying it on to you with all necessary tax and National Insurance deducted.

Working through a limited company is widely considered to be the most tax efficient way of working and allows greater opportunities for tax planning. Forming a limited company is a straightforward process, which is usually completed the same day.

The best way to work as a locum will vary depending on your contract, so it is a good idea to discuss your individual circumstances with a professional who can recommend the best option for you. Alternatively, read our guide to limited vs umbrella.

As a limited company locum doctor, you are entitled to claim business costs such as travel, uniform, textbooks and equipment for example stethoscopes as expenses. For more information on what costs are classed as an expense and the process involved in claiming expenses take a look at our contractor’s guide to expenses.

We find that many of our clients choose to work through their own limited company because they can add cover to ensure their business through professional indemnity insurance.

Locum doctors who are contracting for the NHS are usually covered by the NHS indemnity cover. However, this cover does not necessarily extend to locums working in a private hospital or in general practice. Due to the nature of working as a doctor, it is important to ensure that you do not put yourself at risk and consider taking cover if it is not provided. Visit our insurance page for more information on what cover you may need as a locum.

Does IR35 apply to a locum doctor working through a limited company?

IR35 is a legislation introduced by HMRC to tackle ‘disguised employment’. This is to prevent those working on a contractor basis receiving the same benefits that full-time employees do.

Like all other contractors, freelancers, consultants and interims, if you are planning to work through your own limited company then you will need to confirm whether your contract is classed as ‘inside’ or ‘outside’ of IR35.

When working ‘outside’ IR35 you will receive the full benefits and rewards when working as a legitimate limited company contractor. If your contract is deemed ‘inside’ IR35, then you will be limited to the benefits you receive as a contractor and be required to pay full tax and National Insurance – visit our guide to IR35 for more information.

If you are unsure whether your contract falls inside or outside IR35, why not take advantage of our IR35 contract review service?