Self Employment

Being self employed is relatively straightforward.

You will almost always provide a service directly to the client and not work through an agency.

You will need to complete an annual self assessment tax return and can offset business expenses against your tax bill.  Self employment is not as tax efficient an option as working through a limited company (personal service company),  provided that the personal service company does not have to apply the IR35 tax regulations.

EXPENSES

Self employed individuals can claim expenses which are ‘Wholly and Exclusively’ incurred for business purposes.  An employee can claim far fewer expenses.  This means that a locum who is self employed will pay less tax and national insurance than a locum paid by a PAYE salary.

If you start to work as a self employed locum it is necessary to inform the Revenue when you start this type of work.

SUPERANNUATION

If a locum GP provides self employed services to an NHS general practice, NHS superannuation contributions are due on the income received.

Superannuation is accounted for using Locum Form A and Locum Form B.

These can be downloaded from http://www.nhsbsa.nhs.uk/

Locum GP’s may also have to complete a Type 2 superannuation form at the end of the tax year showing all sources of NHS superannuable income earned and all NHS superannuation paid in the year.

PROVISION FOR TAX AND NATIONAL INSURANCE

If you are self employed you will be responsible for making provision for your own income tax and national insurance and paying these to HMRC when they fall due.

AGENCIES

It is very unlikely that an agency will engage a locum on a self employed basis.  The agency may be held responsible for a self employed locum’s unpaid tax on national insurance.

HOW WE CAN HELP

  • We can help you in informing the Revenue you have become self employed, registering for you to pay self employed tax and national insurance and assisting in the preparation of your self assessment income tax return at the end of the year.
  • We can assist in the preparation and submission of all superannuation forms including Locum Forms A and B and the Type 2 form.
  • We can advise you of the right amount of tax and national insurance to put aside to ensure you have sufficient funds to cover your tax bill when it falls due.