Locum doctors and NHS contractor physicians face the most complex combination of income sources, pension considerations and IR35 exposure in contracting. The NHS pension, the annual allowance tapering at high incomes, and the off-payroll rules that have applied to NHS trusts since 2017 all interact in ways that require specialist planning.
NHS trusts and boards have been responsible for IR35 status determinations since April 2017. Many locum doctors were moved to inside IR35 arrangements at that point, either through PAYE or under NHS-framework locum contracts. For those still operating through a personal service company, the status of each engagement needs to be reviewed against the current working arrangements.
Locum doctors with higher incomes are subject to the tapered annual allowance, which reduces the pension annual allowance from £60,000 down to £10,000 for those with adjusted income above £260,000. This interacts directly with NHS pension accrual. An annual allowance charge can arise from NHS pension growth alone. We model this carefully, including carry-forward from previous years.
Doctors working across NHS employed, NHS locum and private practice income streams have some of the most complex self assessment positions in the UK. The interaction between PAYE earnings, NHS pension, PSC dividends and private practice income requires careful planning and accurate filing to avoid both under-declaration and overpayment.
For locum doctors still operating through a PSC, the comparative analysis against umbrella or direct PAYE must account for the NHS pension implications, not just headline take-home. The pension is often the dominant factor at consultant-level incomes, and the choice of engagement structure affects annual allowance charges significantly.
We model the full picture (NHS employed income, locum income, pension accrual, PSC dividends and private practice) and plan the most efficient structure. For doctors, this is not separable: the parts interact in ways that only become visible when you model them together.
We track your pension annual allowance position each tax year, model whether carry-forward from previous years is available, and advise on managing pension contributions to avoid unnecessary annual allowance charges.
Accurate, complete self assessment returns that account for all income sources, including NHS pension annual allowance charges, dividend income and private practice receipts. Filed on time with full records retained.
Book a free call. We will talk through your IR35 position, your structure and whether there is anything worth changing. No hard sell, no obligation.