Save on Locum Doctor’s Tax: 8 Easily Forgotten Expenses Claims

November 23, 2016

There are many benefits of being a locum doctor. Flexibility, better pay, and improved prospects to name a few.

However, being locum also comes with a number of increased financial pressures. Just as when you start any business, you now have increased financial responsibility — and this includes doctor’s tax.

No contract means no employer who has to take care of you. All expenses have to come out of your own bank.

In the hectic life of a locum doctor, it can be all too easy to forget about recording and claiming expenses. However, with just a little bit of thought, you could be saving yourself a lot of money.

Discover eight doctor’s tax expenses you should never forget to claim:

1. Vehicle Costs

Driving from hospital to hospital and patient to patient can get expensive. Fuel costs aren’t getting any lower and wear and tear is also an important factor.

You can cover this in one of two ways.

If you have a vehicle you only use for business, you can simply claim all costs on your expenditure list. However, if like most locums you use your car for both business and personal needs, you can’t claim every cost against your business.

In this circumstance, you can use the standard mileage rate system set up by the government. Record how many miles you travel each day for work, then at the end of the tax year you can apply a standard cost per-mile rate to each journey. You will then have a government-approved deduction based on the average costs of fuel, repairs, insurance, etc.

2. Using the Home Office

Plenty of locum doctors base themselves out of a home office.

Making arrangements with hospitals, filing reports, and undertaking general admin tasks for your locum business requires a base of operations.

If you decide to designate an ‘official’ room in your home for locum doctor work, you can actually claim a proportion of rent or mortgage interest, utilities, and insurance back.

3. Insurances

As locums aren’t tied to any establishment, they must have their own indemnity insurance to protect against potential financial backlash. It is actually a legal requirement for locum doctors to have indemnity insurance, so there is no getting around this bill.

You may also want other, non-essential insurances. Plenty of insurance packages for doctors cover illness, accident or injury, jury service, and other occurrences that can affect the income of a locum doctor.

4. Training and Medical Courses

Training is essential to remain relevant and efficient in almost — any job and nowhere is that more true than in the medical profession.

Practices and treatment techniques are changing constantly. Often, this training is provided by the NHS for those in a permanent position. However, locums don’t get such benefits.

Fortunately, locums can claim the cost of necessary training in full on their expenditures list.

5. Further Educational Materials

Beyond extra training and courses, it is imperative that locums keep up to date with new research, medical discoveries, and practices through other academic works.

The costs of seminars, journals, research papers, and other materials required for you to do your job better can all be claimed under expenses.

Save on your doctor’s tax and keep yourself ahead of the curve.

6. The Strangest Way to Reduce Doctor’s Tax? Administration Tools

Anything necessary for you to complete your work is deductible.

That means admin tools, such as a work computer, printer, paper, pens, and the like are all deductible. While locum doctors may have plenty of unique deductibles to think about, you should never forget to claim on these basics, too.

The cost of a work computer can make a sizable dent in your finances. Don’t forget to cash in on available relief and save yourself some tax.

7. Work Phone

Having a work phone as a locum is essential. Working with multiple hospitals and clinics, you’ll always be communicating with clients.

If you use a work phone to keep work and personal life separate, you can claim the cost of the phone and the monthly plan — or pay-as-you-go payments — on your doctor’s tax bill.

8. Pension Savings

As a locum doctor, you unfortunately miss out on pension savings from the NHS. However, that doesn’t stop you making your own pension contributions.

Pension pots are not only vital for your future self; they’re a great way of gaining some tax relief. Money put into a pension is untaxable — up to a set amount — which means anything you put away will reduce your tax contributions.

Unfortunately, you won’t see this money immediately. If you earn £70k and you put £5k away in pensions, you will still be taxed for £70k that year. However, the pension plan you use can then claim the proportion of tax that £5k was billed and put it on top of your pension plan.

The money is still yours — you just have to wait for it. It either means you can put less pension away and still achieve the same amount as you would like, or you can have a large nest egg available when retirement rolls around.

Need help sorting your doctor’s tax? Russell Smith Chartered Accountants are experts in medical business and finance.


Image via Images Money / Flickr

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