Locum doctors: tax and NHS pension

A locum GP engaged under a contract for services is usually taxed as a self employed professional, paying income tax on locum profits through Self Assessment. A locum who wants NHS pension cover must apply to join the NHS Pension Scheme, then pay both the member contribution and the employer contribution received from each practice to the host Board, and send an annual certificate of pensionable earnings once the tax return deadline has passed.

Is a locum GP employed or self employed for tax?

It depends on the contract, not the job title. HMRC’s Employment Status Manual at ESM4062 warns that a locum standing in for another doctor should not be assumed to have the same status as that doctor, because the terms of engagement may be very different. Some doctors who call themselves locums are really engaged to assist a GP rather than to take the GP’s place, and HMRC says the earnings of such assistants are usually employment income subject to Class 1 National Insurance.

The Business Income Manual at BIM54001 explains that GPs working for the NHS will typically be carrying on a profession taxable as trading income, but where a doctor has a contract of employment the earnings are employment income taxed under PAYE. The terms of each engagement need checking against the normal tests, because HMRC says it is essential to ascertain the contractual terms of any engagement. See employment status tests for how control, substitution and mutuality are weighed. A locum who works through a personal company also needs to consider the off payroll working rules.

How are self employed locum profits taxed?

Locum fees are receipts of a profession. Profits are worked out under the normal rules: fees less allowable business expenses incurred wholly and exclusively for the locum work. Keep a record of every session, invoice and payment, because the same figures feed the pension certificate described below. Income tax for 2026 to 2027 is charged at 20% on taxable income from £12,571 to £50,270, 40% from £50,271 to £125,140 and 45% above that, after the £12,570 personal allowance. Locums also pay self employed National Insurance and will usually be within payments on account once their bill grows.

Pension contributions are not deducted as a business expense. BIM54025 confirms that Additional Pension contributions and Additional Voluntary Contributions are not allowable in computing a practitioner’s trading profits, and ordinary scheme contributions are relieved separately as personal pension contributions, as explained below.

Can a locum GP join the NHS Pension Scheme?

Yes, but not automatically. Under regulation 15(4) of the National Health Service Pension Scheme Regulations 2015 (SI 2015/94), the automatic inclusion rules do not apply to a locum practitioner. Regulation 15(5) requires a locum who wishes to join to apply to the scheme manager in the form the scheme manager requires, and regulation 15(6) says the application must not relate to a period of engagement which ended more than 10 weeks before the date of the application. Membership starts on the date the scheme manager specifies.

The definition of “locum practitioner” in Schedule 15 is narrow. It covers a medical practitioner, other than a GP registrar, who is on a medical performers list and is engaged under a contract for services by a GMS practice, PMS practice, APMS contractor, out of hours provider, Local Health Board or NHS England to deputise or temporarily assist with NHS services. The engagement must be made “otherwise than in pursuance of a commercial arrangement with an agent”, so sessions booked through a commercial locum agency fall outside the definition.

How much does a locum pay into the NHS pension?

There are two elements.

• Member contributions. Regulation 31 sets tiered rates by pensionable earnings. For scheme years 2025/26 to 2027/28 the rates in Table 4 run from 5.2% to 12.5%. Regulation 31(11) uprates the earnings bands (other than the lowest band figures) by the consumer prices index for 2026/27 and 2027/28, so check the current bands before setting a rate.
• Employer contributions. Regulation 33 sets the employing authority’s standard rate at 23.7% of pensionable earnings. Paragraph 7(7) of Schedule 12 requires a locum to pay the host Board an amount equal to the payments received from the employing authority in respect of those employer contributions. In other words, the practice pays the employer share to the locum, and the locum passes it on.

Pensionable earnings are not simply gross fees. Paragraph 7 of Schedule 10 defines a locum’s practitioner income as fees for locum services, excluding payments to cover expenses or for overtime, minus such expenses as are deductible under guidance laid down by the Secretary of State.

What forms and deadlines apply to locum pension contributions?

Schedule 12 says that accounts and information must be provided in such form as the scheme manager from time to time requires, so locums should use the current versions of the locum forms issued by the scheme administrator for the relevant scheme year rather than old copies. The legal deadlines sit behind those forms:

Obligation	Deadline	Reference
Pay member and employer contributions to the host Board	7th day of the month after the month in which the earnings were paid	Regulation 31(8) and Schedule 12 paragraph 9
Host Board pays contributions to the scheme manager	19th day of the following month	Schedule 12 paragraph 7(10)
Annual certificate of pensionable earnings to each relevant host Board	Within one month starting on the date the tax return was due	Schedule 12 paragraph 2(3)
Revised certificate if the first was based on provisional figures	Within one month starting on the date the revised return was due	Schedule 12 paragraph 2(4)

The annual certificate must be based on the payments received from employing authorities and on the return made to HMRC for the year, so the pension paperwork and the tax return need to agree. Schedule 12 paragraph 10 lets the scheme manager recover contributions a locum has failed to pay.

How does tax relief on locum pension contributions work?

BIM54020 explains that a self employed practitioner is responsible for both the employee and the employer contribution, and that for tax purposes both elements are relievable as member contributions. Because locum profits are taxed as trading income, the net pay arrangement used for salaried NHS staff cannot apply. The Pensions Tax Manual at PTM044100 says that in these circumstances relief should be claimed through the Self Assessment tax return. Relief is limited to the greater of £3,600 and the individual’s relevant UK earnings chargeable to income tax for the year, under section 190 of the Finance Act 2004.

For the annual allowance, BIM54020 notes that superannuation contributions to the NHS Pension Scheme are disregarded when testing whether contributions exceed the allowance. The test instead looks at growth in benefits, covered in defined benefit pension input amounts and the pension annual allowance. BIM54020 also confirms that both elements paid by the individual can be excluded from threshold income for the tapered annual allowance, unless paid under a salary sacrifice or similar arrangement made on or after 9 July 2015.

Does VAT apply to locum doctor services?

Revenue and Customs Brief 6 (2026), published on 17 July 2026 after the First Tier Tribunal decision in Isle of Wight NHS Foundation Trust v HMRC [2025] UKFTT 1114 (TC), sets out HMRC’s current view. Item 5, Group 7, Schedule 9 of the VAT Act 1994 exempts “the provision of a deputy for a person registered in the register of medical practitioners”, and HMRC now accepts that supplies of GMC registered locum doctors may fall within it, including where the doctor is supplied through an employment business. Only the person who made the supply and charged output tax can claim a refund, and claims are limited to supplies in the last 4 years.

What does this look like in practice?

Illustration only. Dr Shah, a locum on the performers list, is booked directly by one practice in May. After the permitted expenses deduction her pensionable earnings for the month are £8,000, and her expected annual pensionable earnings put her in the 12.5% band.

• Member contribution: £8,000 at 12.5% is £1,000.
• Employer contribution paid to her by the practice: £8,000 at 23.7% is £1,896.
• Total paid to the host Board by 7 June: £2,896.

On her tax return she claims relief on both elements as member contributions. Her pension certificate for the scheme year must reconcile to the fees in her accounts.

What mistakes do locums commonly make?

• Applying to join the scheme too late. An application cannot cover an engagement that ended more than 10 weeks earlier.
• Trying to pension sessions booked through a commercial agency, which fall outside the definition of locum practitioner.
• Keeping the employer contribution paid by the practice instead of passing it to the host Board.
• Deducting pension contributions in the accounts instead of claiming relief on the tax return.
• Missing the annual certificate deadline or filing figures that do not match the tax return.
• Assuming self employed status without reading the engagement terms.

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Related Accountapedia entries

• Associate dentists: self employed status and expenses
• Income tax rates and bands for 2026 to 2027
• Pension contributions for sole traders
• National Insurance after State Pension age
• Employed and self employed at the same time

Sources

• GOV.UK: Manual page ESM4062
• GOV.UK: Manual page BIM54001
• GOV.UK: Income tax rates
• GOV.UK: Manual page BIM54025
• legislation.gov.uk: SI 2015/94
• GOV.UK: Manual page BIM54020
• GOV.UK: Manual page PTM044100
• GOV.UK: Vat liability of the supply of temporary medical staff 2026

Reviewed by Christine Anderson, Broker, Solar Protect. Last reviewed 8 October 2026. Part of Accountapedia, the Solar Protect guide to UK tax and accounting. This page is general information, not personalised advice.