Tax and Insurance Overview for Locum workers

For anyone wishing to work as a locum, it is important that you work within the guidelines set out by the Inland Revenue concerning employment Vs self-employment.  We recommend to everyone that you visit the Inland Revenue site for further information.

Alternatively, we can put you in touch with a specialist tax advisor, who work alongside the Inland Revenue and can provide a range of financial services including self-employment and limited companies. They can advise on working in the most tax efficient manor applicable to your circumstances.  Contact our office and speak to Lorna for more information on 0115 968 1515 OR 0845 060 1515

The change in the tax laws relating to Member Serviced Companies (MSC) has made certain company tax solutions non-viable and more expensive to the individual than PAYE ant National Insurance stopped at source. Personal Serviced Companies (PSC) are still a legal way to draw your earning as dividends, making them more tax efficient.
Speak to our tax consultant today.

Employed or Self-employed – Information from the Inland Revenue

A worker’s employment status, that is whether you are employed or self-employed, is not a matter of choice. Whether someone is employed or self-employed depends upon the terms and conditions of the relevant engagement.

As a general guide as to whether a worker is an employee or self-employed; If the answer is 'Yes' to the following questions, it will usually mean that the worker is self-employed:

• Can they hire someone to do the work or engage helpers at their own expense? Self employed individuals must have the right to substitute themselves. Though this right may not be exercised.
• Do they risk their own money? (Is your annual income guaranteed?)
• Do they provide the main items of equipment they need to do their job, not just the small tools that many employees provide for themselves? As veterinary consultants this would be knowledge and maybe a stethoscope.
• Do they agree to do a job for a fixed price regardless of how long the job may take? I.E a fixed daily rate .
• Can they decide what work to do, how and when to do the work and where to provide the services? Consultants work within the practice hours and are in ultimate control of their treatment decisions.
• Do they regularly work for a number of different people? Often the case fro locums.

• Do they have to correct unsatisfactory work in their own time and at their own expense? Ensure you have your own liability insurance.

Just because a worker is self-employed in one job, doesn't necessarily mean he or she will be self-employed in another job. Equally, if a worker is employed in one job, he or she could be self-employed in another.

Whenever you undertake a locum position, if you wish to invoice the client as a self-employed locum, you must must supply the Practice with a contract for services. This a  “self employment” compliant document  that sets out the terms under which you are working. Providing your Inland Revenue Self Employed Registration Number to the practice or working though a Limited Company (who is your ultimate employer) is essential.

Please feel free to contact us for further information to clarify what can be a confusing area

Some Useful contacts:

IR Self Assessment order line on 0845 900 0404.

IR Help line for the Newly Self-Employed on 0845 9154 515

Indemnity Insurance for Locums

Most practices have the facility to indemnify named personnel.  This can cover locums provided that the locum’s details are phoned through to the Insurer for the period of cover.  There are two shortfalls with the system and the current insurance structure.

Firstly the locum is often replacing a current member of staff for a set period.  When the locum becomes the named person then the original staff member is not covered.  This could be a problem for the practice in the event that a claim of negligence is brought against the staff member on leave while they are away and the cover has been switched to the locum.

The second shortfall affects the locum should a claim of negligence be brought against him or her after a locum has ended.  The locum is no longer in the service of the practice and no longer insured. 

In both situations the practice is relying on the goodwill of the insurance company and they are expressing more and more concern that they are underwriting the risk of two individuals for the price of a single premium.

We strongly recommend that wherever possible you obtain your own personal professional indemnity insurance. This works out at around 1-2 days locum fees per year.

Whenever you undertake a locum position, it is important that you confirm that you have insurance cover or it has been arranged for you by the practice.