Guide
Locum tax deductions: what you can claim in each structure
Updated
The deductions a locum can claim depend almost entirely on structure. The same £1,000 of professional fees might be fully deductible, partially claimable, or not claimable at all.
The structure decides the rules
- PAYE / umbrella employee
- Employment expenses are tightly restricted: an expense must be incurred wholly, exclusively and necessarily in performing the duties. Professional fees and subscriptions on HMRC's approved List 3 (which includes the GMC, GPhC and RCVS) are claimable; ordinary commuting is not (gov.uk: tax relief for employees).
- Self-employed locum
- Expenses are deductible if wholly and exclusively for the trade: registration fees, indemnity, travel between engagements (not home to a regular workplace), equipment, a proportion of home office costs (gov.uk: self-employed expenses).
- Limited company
- The company deducts business costs before corporation tax: accountancy, indemnity, registration fees, equipment, business travel, and, most valuably, employer pension contributions. Costs with personal benefit can trigger a benefit-in-kind charge.
The common locum expenses, route by route
| Expense | PAYE / umbrella | Self-employed | Ltd company |
|---|---|---|---|
| GMC / GPhC / RCVS registration | Yes (List 3 claim) | Yes | Yes |
| Medical indemnity / insurance | Yes, if List 3 body | Yes | Yes |
| Royal college / union subscriptions | Yes, if on List 3 | Yes | Yes |
| Travel home to the engagement | No (ordinary commuting) | Usually no | Only if workplace is temporary |
| Travel between sites in a day | Yes | Yes | Yes |
| Exam and course fees | Rarely (must be duty, not qualification) | If updating existing skills | Company can pay for business training |
| Accountancy fees | No | Yes | Yes |
The travel row deserves emphasis: since 2016, umbrella workers under supervision, direction or control cannot claim home-to-work travel and subsistence, and a locum's shift location is usually a regular workplace for the duration of the engagement. Claims agencies promising large locum travel refunds are a recurring HMRC enforcement target.
How to actually claim as an employee
- Under £2,500 of employment expenses in a year: claim through HMRC's online service or form P87, with evidence.
- Over £2,500, or any self-employment income: claim through a self assessment tax return.
- Company costs simply reduce profit before corporation tax; keep receipts and put them through the company's books, not your own.
Deduction rules are fact-specific and HMRC's approved List 3 changes; check the current list on gov.uk and confirm anything material with an accountant. This page is general information, not tax advice.