What is different about tax for locum pharmacists
Most locum pharmacists juggle more than one arrangement: self-employed bookings with independent pharmacies, shifts through an agency, perhaps an employed hospital or GP practice role. Four things shape your tax more than anything else:
- Status. HMRC withdrew its guidance specific to locum pharmacists with effect from 30 June 2023. Each engagement is now judged on the general employment status rules.
- Making Tax Digital. It is your turnover, not your profit, that decides whether you must use it, and a full-time locum often clears the threshold.
- VAT. Services within your registered profession are exempt, but how you are supplied can change that.
- Pension. Self-employed community pharmacy locum fees cannot be paid into the NHS Pension Scheme.
This page is part of our medical accountants hub, and the locum pharmacist tax guide covers the three payment models in more depth.
Employed, self-employed or limited company
Deciding your status
Whether a booking is self-employed depends on the facts of that engagement, not on what the pharmacy calls it. HMRC's Check Employment Status for Tax (CEST) tool asks who decides what work you do, who decides when, where and how you do it, how you are paid, and whether you get any benefits or expenses. HMRC will stand by the result as long as your answers are accurate, so run it for regular engagements and keep a copy.
Self-employed
You invoice each pharmacy, pay Income Tax and Class 4 National Insurance through Self Assessment, and deduct your business costs. You can be employed and self-employed at the same time: PAYE shifts and self-employed profits simply sit on the same tax return.
Limited company
Your company invoices the pharmacy or agency, pays Corporation Tax at 19% on profits up to £50,000, and pays you salary and dividends. The off-payroll working rules (IR35) decide whether it saves tax. They apply contract by contract. Medium and large clients, such as pharmacy chains, and public sector bodies decide your status. Where the client is a small private business, as many independent pharmacies are, your own company decides and carries the risk. Our IR35 quick assessment is a sensible first check.
Agency and umbrella work
Agencies may ask you to be employed by an umbrella company. The umbrella becomes your employer and pays you through PAYE, and the off-payroll working rules are unlikely to apply. The advertised rate usually includes the umbrella's own costs, so you may not receive it in full. The agency must give you a key information document showing the rate paid to the umbrella and what it will deduct, which lets you compare it with a self-employed booking.
Worked example: a self-employed locum in 2026/27
A self-employed locum pharmacist in England invoices £62,000 in 2026/27 and has no other income. Expenses are £4,000: 6,000 business miles at 55p (£3,300) plus £700 of indemnity, GPhC fees and CPD. The figures ignore pension contributions and student loans; Scotland has different Income Tax bands.
- Profit: £62,000 less £4,000 is £58,000.
- Income Tax: £37,700 at 20% is £7,540, plus £7,730 (the profit above £50,270) at 40% is £3,092. Total £10,632.
- Class 4 National Insurance: £37,700 at 6% is £2,262, plus £7,730 at 2% is £154.60. Total £2,416.60.
- Total tax and National Insurance: £13,048.60, leaving £44,951.40.
Two things follow. The profit crosses into higher rate, so every extra £1,000 of profit now costs £420 in tax and National Insurance. And if turnover was similar in 2024/25, this locum is already inside Making Tax Digital, because the £50,000 test uses income before expenses. Check your own figures with our self-employed tax calculator.
Expenses locum pharmacists can claim
| Expense | Self-employed treatment |
|---|---|
| GPhC registration fee | Allowable. Employed pharmacists can also claim relief on it. |
| Royal Pharmaceutical Society and other memberships | Allowable if related to your work. |
| Professional indemnity insurance | Allowable. |
| Travel between pharmacies | Allowable. Cars: 55p a mile for the first 10,000 business miles in 2026/27, then 25p, using our mileage claim calculator. Travel between home and a regular place of work is not allowable. |
| CPD and courses | Allowable if they improve skills you use, keep you up to date, or develop new skills related to your work. A course to start a new, unrelated business is not. |
| Reference books, phone, software | Allowable for the business share. |
| Accountancy fees | Allowable for business accounts, but not the cost of preparing your personal Self Assessment return. |
On employed work for the NHS, a private hospital, a local authority or an independent care provider, pharmacists can claim a flat rate expense of £80 a year for uniforms, work clothing and tools, plus relief on approved professional fees such as GPhC registration.
VAT for locum pharmacists
Pharmacists are on HMRC's list of health professionals for VAT. Your services are exempt when they are within the profession you are registered for and their main purpose is protecting, maintaining or restoring health. Exempt income does not count towards the £90,000 VAT registration threshold, so a locum doing only pharmacy work normally never registers. Other income does count, for example writing articles for journals, which HMRC lists as standard-rated.
The way you are supplied can change the answer. HMRC generally treats supplies of health professional staff as taxable, and whether a company is supplying pharmacy services or simply supplying staff depends on who directs and controls the work. HMRC's July 2026 change, which treats supplies of GMC-registered locum doctors as potentially exempt, does not extend to pharmacists. If you work through your own company or an agency, ask your accountant to review the VAT position.
Pension for locum pharmacists
The NHS Pension Scheme is open to people directly employed by the NHS, medical, dental and ophthalmic practitioners, and freelance locum medical practitioners. Other self-employed people cannot join, so self-employed community pharmacy locum fees are not pensionable, and nor is work through an agency. A pharmacist employed directly by the NHS can join on that job.
Many locums pay into a personal pension instead. The annual allowance is £60,000 for 2026/27, tapered where threshold income is over £200,000 and adjusted income is over £260,000.
Making Tax Digital for locum pharmacists
If your self-employment and property income before expenses was over £50,000 in 2024/25, you should have been using Making Tax Digital for Income Tax since 6 April 2026. The threshold is £30,000 from 6 April 2027 (based on 2025/26) and £20,000 from 6 April 2028. PAYE shifts and dividends from your own company do not count. You keep digital records and send quarterly updates by 7 August, 7 November, 7 February and 7 May. HMRC will not give penalty points for late quarterly updates during 2026/27, but late tax returns still attract them. More in our Making Tax Digital guide.
Key dates for 2026/27
| Date | What is due |
|---|---|
| 31 July 2026 | Second payment on account for 2025/26 |
| 7 August 2026 | First MTD quarterly update (6 April to 5 July), if you are in MTD |
| 5 October 2026 | Register for Self Assessment if you started self-employed locum work in 2025/26 |
| 7 November 2026, 7 February 2027, 7 May 2027 | Remaining MTD quarterly updates for 2026/27 |
| 31 January 2027 | 2025/26 online return, balancing payment and first payment on account for 2026/27 |
| 6 April 2027 | MTD starts for qualifying income over £30,000 in 2025/26 |
| 31 July 2027 | Second payment on account for 2026/27 |
How GoForma helps locum pharmacists
GoForma is a UK online accountancy practice based in London. We work with clients across the UK by phone, video, email and WhatsApp, and our accountants are ACCA and AAT qualified. FreeAgent accounting software (worth £360 a year) is included in every package, so you can invoice pharmacies and log mileage as you go.
- Start Sole Trader + MTD at £68 a month covers your Self Assessment, quarterly Making Tax Digital submissions and a dedicated personal accountant. If you are not yet in MTD, Start Sole Trader is £44 a month, 50% off for the first 3 months.
- Start Bundle at £88 a month, 50% off for the first 3 months, is for locums with a company: year-end accounts, the CT600, payroll for one director and an IR35 review on every contract.
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