The GP Locum Tax Guide

1. What changes when you stop being employed

This guide walks through every deduction that comes out of a locum GP's fees in the 2026/27 tax year, in the order you will meet them. It is written for GPs working as sole traders — freelance, invoicing practices directly, not through an agency or a limited company.

The short answer: on £100,000 of locum fees with £5,000 of expenses, a typical locum GP pays around £24,000 in income tax and Class 4 National Insurance and a further £11,250 in employee NHS pension contributions, leaving roughly £60,000 — or about £54,000 if you are repaying a Plan 2 student loan. Set aside 30% of every invoice for tax and NI, and pay your pension monthly on top.

As a trainee you were an employee. Tax, NI, student loan and pension all came off before the money hit your account, and you never had to think about any of it.

As a locum you are a sole trader. Every practice pays you your full invoice, and nothing is deducted. You are now responsible for calculating and paying:

Two deadlines to diary immediately:

• Register for Self Assessment by 5 October following the end of the tax year in which you started. Started locuming in September 2026? You are in the 2026/27 tax year, so you must register by 5 October 2027 — but register as soon as you start, because you will need your UTR number well before then.
• Your first tax bill is due 31 January after the end of that tax year. For work done in 2026/27, that is 31 January 2028 — which sounds generous until you read section 8.

2. Income tax on locum earnings

Income tax is charged on your profit, not your fees. Profit is everything you invoiced, minus your allowable expenses.

2026/27 rates (England, Wales and Northern Ireland)

These thresholds are frozen until 5 April 2031 — the freeze was extended again at Budget 2025 — so every rate rise pushes a little more of your income into the next band.

Scotland has its own bands — six of them, running from 19% to 48%, with the higher rate starting well below £50,270. If you are locuming in Scotland, the figures in this guide for NI, pension and expenses still apply, but the income tax numbers will not. The locum tax calculator applies Scottish rates properly if you select them.

The £100,000 trap

Above £100,000 of adjusted net income your personal allowance is withdrawn at £1 for every £2 earned, disappearing entirely at £125,140. Across that £25,140 band you pay an effective 60% income tax rate, or 62% once Class 4 NI is added, or 71% if you are also repaying a student loan.

This band matters more to locums than to most people, because your NHS pension contributions reduce your adjusted net income — which is one of the few legitimate ways out of it. Section 9 shows what that is worth on £120,000 of fees.

3. National Insurance: Class 4 and Class 2

Class 4 is the self-employed equivalent of the NI that used to come off your payslip. It is charged on the same profit figure as income tax:

Because the rate drops to 2% above £50,270, Class 4 is fairly flat for most locums — around £3,200 on £95,000 of profit, and only £4,200 on £145,000.

Class 2 is no longer compulsory. If your profits are above the Small Profits Threshold of £7,105, you are treated as having paid it and you get your qualifying year for the state pension without paying anything. Below that, you can pay voluntary Class 2 at £3.65 a week — £189.80 for the year — to protect your record, which is far cheaper than voluntary Class 3 at £18.40 a week. Worth knowing if you take a year out or go part-time abroad.

Important: unlike income tax, Class 4 NI is not reduced by your pension contributions. Your pension saves you 40% or 45% on the income tax, but the Class 4 is calculated on your profit before pension relief.

4. Student loan repayments

Nearly every newly qualified GP has one, and nearly every locum tax guide forgets about it. As a sole trader you repay through Self Assessment, in the same bill as your tax and NI, at 9% of profit above your threshold:

If you have both an undergraduate and a postgraduate loan you pay both — 15% of income above the postgraduate threshold. On £95,000 of profit, a Plan 2 loan alone costs £5,905 a year. It is not optional, it is not spread across the year, and it lands on 31 January with everything else. Budget for it.

Two things that make it worse than the PAYE version you are used to: pension contributions do not reduce it, and it is excluded from payments on account — so it arrives as a lump every January rather than being smoothed over two instalments.

5. The NHS pension: how locum contributions work

This is the part that is unique to GPs, and the part most generic accountants get wrong. What follows is the tax-relevant summary; the mechanics of the forms, the day-counting rules and the traps are covered properly in the Locum GP Pension Guide.

The 90% rule

Your pensionable pay is 90% of your locum fee. NHS Pensions assumes a flat 10% for expenses, whatever your actual expenses are. So a £700 day generates £630 of pensionable pay.

The employer contribution passes through you

The practice must pay you an additional 14.38% of your pensionable pay on top of your fee, which you then forward to PCSE along with your own contribution. So your invoice for that £700 day is £700 + £90.59 = £790.59.

That extra money is not yours. If you decide not to pension the work, you must return the employer element to the practice. Do not count it as income when working out what you have earned — and make sure your invoice separates it out clearly. The locum invoice generator puts it on its own line.

Your own contribution: the tier table

Annualisation: why almost every locum pays 12.5%

Here is the bit that catches people out. Your tier is not set by what you earn — it is set by what you would earn if you worked every day of the year.

Annualised earnings = total GP pensionable income ÷ days of pensionable service × 365

Work 100 days at £630 pensionable and you have earned £63,000 — but your annualised figure is £229,950, so you pay 12.5%, not 10.7%.

The practical shortcut: if your pensionable pay is more than about £185 a day — a fee of roughly £206 — you are in the 12.5% tier no matter how part-time you are. Every locum GP working at a normal rate is in the top tier, and you can work this out before you accept a single session.

Annualisation raises what you pay; it does not raise what you get. If you hold a salaried or partner post that runs for the whole scheme year alongside your locum work, annualisation does not apply — which is why some locums keep a small underlying role.

The 10-week rule

You cannot pension locum work that ended more than 10 weeks ago. Forms submitted late are rejected, regardless of when the practice actually paid you.

• Form A — one per practice, per payment. The practice validates it.
• Form B — a monthly summary of all your Form As, submitted with your payment.
• Contributions must reach PCSE (England) or your health board (Wales) by the 7th of the following month.

The two ways to submit

In England there are two routes, and both are perfectly valid. They differ in who fills the form in, where the practice's sign-off happens, and how much of the audit trail you get without thinking about it.

Fully electronic, through PCSE Online. You complete the Form A in PCSE Online, which calculates the contributions for you. The practice is notified that a form is awaiting approval and signs it off electronically in their own PCSE Online account — practices are required to approve Locum A forms submitted this way, though the permission has to have been assigned to the right person by the practice's user administrator. Once the Form A is approved you can submit the Form B, and PCSE Online displays your payment reference and keeps a timestamped record that you filed in time. The weakness is that it stalls if nobody at the practice actions it, which is where the 10-week clock runs out.

Fill the forms in yourself and submit them by hand. You complete Part 1 of Form A, send it to the practice with your invoice for them to validate Part 2, fill in your own Form B, and submit the completed forms through PCSE's GP pensions enquiries form, paying your contributions separately by BACS. You see every figure before it is filed, the practice's sign-off travels with the invoice they are already dealing with, and you finish holding a validated form in your own records rather than a status in someone else's system.

Both forms describe this second route as what to do "if you are unable to use PCSE Online". Treat that as an administrative preference rather than a rule — the forms are equally valid submitted this way. What it does cost you is the automatic audit trail: if a form is ever queried you need your own proof that the Form A went to the practice inside the 10 weeks, so send it by dated email and keep the sent message. Do that and the two routes are evidentially equivalent.

Note that the online route does not do the difficult part for you either — it calculates from the income and tier you enter, and getting the tier right under annualisation is your judgement call on both routes.

In Wales there is no online route. You complete Part 1 of Form A, send it to the surgery with your invoice, and send the Form B and your contributions to your local health board.

The Form A and Form B filler is built for the manual route: it works the figures out, fills the real NHSBSA Form A and Form B for you to get validated and submit, and warns you before the 10-week deadline passes.

Two things that are not pensionable: work invoiced through a limited company, and most agency work. If pension accrual matters to you — and at 12.5% employee and 14.38% employer into a defined benefit scheme, it should — check before you accept.

How the pension affects your tax bill

Your employee contributions attract full tax relief at your marginal rate, but it is not automatic. It is claimed on your tax return, in the box for payments to an employer's scheme that were not deducted from your pay. Get this wrong and you will overpay tax by thousands.

Because the relief works by reducing your income, it also reduces your adjusted net income — which is what the £100,000 personal allowance taper and the High Income Child Benefit Charge are measured against. A locum with £115,000 of profit and £13,500 of pension contributions has an adjusted net income of £101,500, and so keeps almost all of their personal allowance.

Keep every Form B. They are the evidence for the claim.

6. Allowable expenses: what locum GPs can actually claim

The test is that a cost must be incurred wholly and exclusively for your practice. Where something has a private use element, claim the business proportion only.

Mileage: the rate changed this year

The approved mileage rate rose for the first time since 2011. For 2026/27:

• 55p per business mile for the first 10,000 miles, up from 45p
• 25p per mile thereafter
• 24p for motorcycles, 20p for bicycles

The new rate took effect from 6 April 2026, so every business mile you have driven this tax year already qualifies at it. If you have been logging at 45p out of habit, go back and correct the record — on 8,000 miles that is an extra £800 of deduction.

The alternative is to claim actual running costs — fuel, insurance, servicing, MOT, depreciation — apportioned by business use. You must pick one approach per vehicle and stick with it, so run both once at the start.

What you cannot claim, and the travel trap

• Travel to a practice you attend regularly. This is the big one. HMRC's position, backed by the Samadian case, is that journeys between home and a workplace you visit habitually are not business travel, even when you are self-employed and even when you do your admin at home. Travel between two practices on the same day, or to a genuinely one-off booking, is a different matter. If you have a regular Tuesday surgery, do not assume the mileage is claimable — this is worth twenty minutes with an accountant.
• Ordinary clothing, including anything you would wear outside work.
• Childcare, however unavoidable it is.
• The employer pension element you pass through to PCSE — it is not yours, so it is not an expense.
• Your own pension contributions as a business expense — they are relieved personally on the tax return instead, as above.
• Client entertaining.

Keep receipts, and keep them digitally. From April 2026 you may be legally required to — see section 10.

7. How much should I set aside?

The safest habit is to move a fixed percentage of every invoice into a separate savings account the day it is paid. These are percentages of gross fees, assuming around £5,000 of expenses and full pensioning at the 12.5% tier:

A workable rule of thumb: 30% of gross fees if you have no student loan, 35% if you do. That is deliberately a little generous at the lower end — in your first year you want to over-reserve, because of payments on account.

Your NHS pension contributions are not included in these percentages. You pay those monthly, out of the fee, before you calculate the set-aside. And remember the employer element in your invoice is not income at all.

Two practical points: use a separate account you cannot see on your banking app's front page, and consider an HMRC Budget Payment Plan, which lets you pay by weekly or monthly direct debit against your next bill.

8. Payments on account: the thing nobody warns you about

If your Self Assessment bill is more than £1,000, HMRC assumes you will earn the same next year and asks you to pay it in advance, in two instalments:

• 31 January — the balance of last year's tax, plus 50% of next year's estimated bill
• 31 July — the other 50%

So on your first 31 January you do not pay one year's tax. You pay one and a half years' tax in a single payment.

Worked through

You start locuming in April 2026 and make £95,000 of profit in 2026/27, giving a tax and Class 4 bill of roughly £24,100, ignoring the student loan for clarity. On 31 January 2028 you owe:

If you had been putting aside 25% of your fees you would have about £24,000 saved and be £12,000 short, in January, with the tax already spent.

You can apply to reduce your payments on account if you know your income will genuinely be lower — going part-time, taking parental leave, a period abroad. But if you reduce them too far, HMRC charges interest on the shortfall. Reduce them on evidence, not optimism.

9. Worked examples for 2026/27

All figures assume England, Wales or Northern Ireland, sole trader, £5,000 of expenses, all locum work pensioned at the 12.5% tier, and no other income. The employer contribution is excluded from fees throughout, because it passes straight through to PCSE.

£60,000 of fees — a typical part-time first year

£100,000 of fees — around 6 to 7 sessions a week

£120,000 of fees — full-time, or locum plus out-of-hours

Note what the pension does here. Profit of £115,000 would sit squarely in the 60% band, but contributions of £13,500 bring adjusted net income down to £101,500, so only £1,500 of the personal allowance is lost.

£150,000 of fees — a heavy full-time year

At this level the personal allowance is fully gone and you are into additional rate on the top slice. It is also the point at which the annual allowance — the £60,000 cap on tax-relieved pension growth — starts to be worth checking, because NHS pension growth is measured by the increase in your promised pension, not by what you paid in. See the annual allowance guide and the annual allowance calculator.

10. Making Tax Digital: what changed in April 2026

From 6 April 2026, Making Tax Digital for Income Tax applies to sole traders whose qualifying income is over £50,000. Qualifying income is your gross self-employment and property income — turnover before expenses — based on your 2024/25 return. Most full-time locums are already over the line.

If you are in scope you must:

• keep digital records of income and expenses in MTD-compatible software
• submit quarterly updates to HMRC
• finish the year with a final declaration in place of the old return

The underlying tax rules are unchanged; only the reporting. There is a soft landing on late-submission penalty points for the first year, but not on the tax itself.

In a genuine first year you are not caught, because the test looks at a return you have not filed yet. The threshold then drops to £30,000 from April 2027 and £20,000 from April 2028, so if you are not caught yet you will be. If you are just starting out, set up proper software now rather than a spreadsheet you will have to migrate later.

11. Should I set up a limited company?

For most locum GPs, no — and the reason is the pension.

Income invoiced through a limited company is not NHS-pensionable. You would give up an employee contribution matched by 14.38% from the employer into a defined benefit scheme, in exchange for a corporation tax saving that is far smaller than it looks once you have paid yourself out of the company. Add the extra accountancy, the payroll, and the fact that many practices will not engage a company because of the pension paperwork, and it rarely stacks up.

A company can make sense for non-pensionable income — private work, medico-legal reports, teaching, media — kept separate from your NHS locum work. That is a conversation for a specialist medical accountant, not a decision to make from a forum thread.

12. Child benefit, if you have children

The High Income Child Benefit Charge claws back child benefit once the higher earner's adjusted net income passes £60,000, at 1% of the benefit for every £200 above, so it is fully withdrawn at £80,000. For 2026/27 child benefit is £27.05 a week for the eldest child and £17.90 for each additional child.

The word that matters is adjusted. Your NHS pension contributions come off before the charge is calculated, which is why a locum with £70,000 of profit and £7,875 of pension contributions may keep considerably more of their child benefit than they expect.

Claim it even if you expect to repay it. Claiming protects your National Insurance credits and gets your child an NI number automatically.

13. Records, software and when to get an accountant

Keep, for at least five years after the filing deadline: invoices raised, bank statements, receipts for expenses, mileage logs with dates and business reasons, and all Form As and Bs.

A setup that takes an afternoon:

1. A separate business current account. Every fee in, every expense out.
2. A second savings account for tax. The set-aside goes there on payment day.
3. MTD-compatible software linked to the business account.
4. One card used for all business spending, so nothing gets missed.

Get a specialist medical accountant. Not a general one. The pension treatment on the tax return, annualisation, Type 2 forms if you also hold a salaried post, and the travel rules are all areas where non-specialists routinely cost locum GPs more than their fee. Expect to pay somewhere in the region of £500 to £1,200 a year, and it is an allowable expense.

14. Work out your own numbers

The tables above are illustrations at round numbers. For your own figures:

• Locum tax calculator — your sessions, rate and expenses in; income tax, Class 4 NI, student loan, pension tier and the exact percentage of each invoice to set aside out, plus a dated timeline of when each payment leaves your account.
• Session rate calculator — the same arithmetic backwards, from the take-home you want to the rate you need to charge.
• Locum invoice generator — an invoice with the pensionable value and the 14.38% employer contribution on their own lines.
• Form A and Form B filler — the monthly pension paperwork, with a warning before the 10-week deadline passes.
• Annual allowance calculator — worth a look once your fees are into six figures.

Frequently asked questions

How much tax does a locum GP pay?

On £100,000 of fees with £5,000 of expenses, roughly £20,900 in income tax and £3,200 in Class 4 National Insurance in 2026/27 — about 24% of gross fees. Add £11,250 of employee NHS pension contributions and £5,905 if you are repaying a Plan 2 student loan, and take-home is around £54,000.

How much should I set aside for tax as a locum GP?

Set aside 30% of every invoice for income tax and Class 4 National Insurance, or 35% if you are repaying a student loan. NHS pension contributions are paid monthly on top of that. In your first year, set aside more than you think you need, because of payments on account.

Do locum GPs pay National Insurance?

Yes — Class 4, at 6% of profits between £12,570 and £50,270 and 2% above that. Class 2 is no longer compulsory; if your profits exceed £7,105 you get your qualifying year for the state pension automatically.

Can I claim mileage from home to a GP surgery?

Usually not, if you attend that practice regularly. HMRC treats habitual journeys between home and a workplace as ordinary commuting, even for the self-employed. Travel between two practices in a day, or to a genuinely one-off booking, is generally claimable — at 55p a mile for the first 10,000 business miles in 2026/27.

Why is my NHS pension contribution 12.5% when I only work two days a week?

Because locum contributions are annualised. Your tier is set by what your pensionable income would be across 365 days of service, not by what you actually earn. If your pensionable pay is above roughly £185 a day, you are in the top tier however few days you work.

When is my first locum tax bill due?

31 January following the end of your first tax year — so 31 January 2028 for work done in 2026/27. That payment includes both the balancing payment for the year and the first payment on account for the next year, which is why it is around 150% of what you might expect.

Do I need an accountant as a locum GP?

It is not compulsory, but a specialist medical accountant usually pays for themselves, particularly on the pension relief claim and on the annualisation and Type 2 rules if you hold more than one type of GP post.

Sources

Checked 11 August 2026, against 2026/27 rates. Rates and thresholds move every April — the primary source wins if it disagrees with anything here.

• Self Assessment tax returns and understanding your bill — GOV.UK, for registration deadlines and payments on account
• Self-employed National Insurance rates — GOV.UK, for Class 4 and the Small Profits Threshold
• Voluntary National Insurance rates — GOV.UK, for the Class 2 and Class 3 weekly rates
• Maintaining Income Tax thresholds until 5 April 2031 — HMRC policy paper, for the threshold freeze
• Repaying your student loan — GOV.UK, for the plan thresholds
• Expenses if you're self-employed and simplified expenses — GOV.UK, for the mileage and home-working rates
• Making Tax Digital for Income Tax — GOV.UK
• High Income Child Benefit Charge and Child Benefit rates — GOV.UK
• NHS Pension Scheme member contributions — NHS Employers, for the tiers
• NHS Pensions member hub — NHSBSA, for the 90% rule, annualisation and the locum forms
• PCSE GP locum pages — for the two submission routes and the 7th-of-the-month payment deadline
• NHSBSA GP locum Form A and Form B 2026/27 — the submission instructions printed on the forms themselves

A note on advice

This article is general information about how the UK tax system applies to locum GPs. It is not personal tax, financial or investment advice, and it does not take account of your circumstances. Figures are estimates based on published HMRC and NHS Pensions rates and are for illustration only. Please take advice from a qualified accountant before making decisions.