Locum Tax Guide: Navigate IR35 & Expenses
This guide provides rigorous, objective data for physicians navigating locum tax guide: navigate ir35 & expenses. No fluff, just the exact figures and mechanics you need.
Core Principles
The primary pitfall for locum physicians is the incorrect classification of their engagement under IR35 regulations, leading to severe unexpected tax liabilities.
As of April 2024, the responsibility for determining employment status for tax purposes shifted significantly. If you operate via a Personal Service Company (PSC) and your engagement is deemed "inside IR35", your fee payer must deduct Income Tax and National Insurance Contributions (NICs) before paying you.
The 24-Month Rule
Travel expenses are only allowable if you spend, or expect to spend, less than 24 months at a specific workplace. The moment you anticipate exceeding 24 months, travel to that site becomes ordinary commuting and is no longer tax-deductible.
Key takeaway
Always model your projected income before making irreversible financial or structural decisions.
The Data
| Scenario | Tax Rate | Net Result |
|---|---|---|
| Sole Trader | 20-45% (Progressive) | Immediate access, simpler accounting |
| Limited Company (Outside IR35) | 19-25% (Corp Tax) + Div Tax | Potential tax efficiency if retaining profits |
Common Questions
When does this apply? (Ref: 143)
The thresholds apply for the 2024/25 tax year and affect all UK-resident physicians earning over £50,270.