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Locum vet accounts and tax

Whether IR35 is your problem or the practice's turns on the size of the practice, not on anything about you — and with 76% of veterinary businesses owning a single practice, most of your work sits in one regime and the corporate work sits in the other. Here is how that works, and what it costs.

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IR35 turns on: The client's sizesmall client, your company decides; medium or large, they do
Making Tax Digital: £50,000 grossturnover, not profit — and a company is out of scope
RCVS renewal: £431for 2026–27, due on or before 30 April

76%of veterinary businesses own just one first opinion practice — so most clients are small

6% / 2%Class 4 National Insurance between £12,570 and £50,270, then above it

7 Augthe first quarterly update deadline, cumulative from 6 April

£3.65a week — Class 2 National Insurance, and it is voluntary

The status question is not about you

Every locum vet has been told at some point that they need to worry about IR35. The useful version of that sentence is more specific: which IR35 regime applies is decided by the size of the practice engaging you, and nothing about your own arrangements changes which one you are in. Get that the right way round and most of the confusion goes away.

Two separate regimes sit in ITEPA 2003. Chapter 8 — the original rules, in place since 2000 — applies where the client is small: your own intermediary decides your status and carries the tax risk. Chapter 10 — the off-payroll working rules, reformed from 6 April 2021 — applies where the client is medium or large: the client determines your status, must issue a Status Determination Statement, and the fee-payer operates PAYE and National Insurance on your fee before you see it.

gov.uk puts the small-client position plainly: a small client in the private and voluntary sectors does not have to determine the employment status of workers engaged through their own intermediaries, and that remains the responsibility of the worker's intermediary.

What that means in the veterinary market specifically

The CMA's verified data does the mapping for you. 76% of veterinary businesses own only one first opinion practice, and the largest business outside the six groups owns 38. So almost every independent practice you locum for is a small client and your own company decides your status. All six large groups — CVS, IVC Evidensia, Linnaeus, Medivet, Pets at Home and VetPartners — are medium or large, so they must issue Status Determination Statements and run the Chapter 10 process.

A locum who covers independent practices and corporate branches in the same tax year is therefore in two different regimes simultaneously, with some fees arriving gross and some arriving with PAYE already deducted. That is not a mistake and it does not need fixing. It does need accounting for properly, because a company receiving net-of-PAYE fees from one client and gross fees from another cannot be run as though every pound came in the same way.

Timing

The 2025 threshold rise has not bitten yet. From 6 April 2025 two of the three Companies Act size tests rose — turnover to more than £15 million and balance sheet total to more than £7.5 million, from £10.2 million and £5.1 million, with the 50-employee limit unchanged. HMRC's manual at ESM10006A states that the earliest tax year the transitional provision will impact a client is 2027/28, because the earliest filing date for an accounting period beginning on or after 6 April 2025 is in January 2027. So no practice has become small because of it yet.

CEST

HMRC's Check Employment Status for Tax tool is, in HMRC's own words, the only tool where it will stand behind the determination made — as long as the information used remains accurate and is in line with HMRC's guidance. Keep the output and the inputs. There is no veterinary-specific HMRC guidance on locum status: the general test applies, which is whether you would have been an employee of the client had the engagement been direct.

The IR35 guide for locum vets works through the status factors and the paperwork on both sides. If you want the arithmetic of company against sole trader on your own numbers, the incorporation calculator does it on 2026/27 rates.

Making Tax Digital

It has already started, and the threshold is turnover

Making Tax Digital for Income Tax is not a proposal. Mandation began on 6 April 2026, and roughly 780,000 individuals are in the first tranche.

Qualifying income over	Tested on tax year	Mandatory from
£50,000	2024/25	6 April 2026
£30,000	2025/26	6 April 2027
£20,000	2026/27	6 April 2028

Two features of that table catch locums out. The first is what qualifying income means: gross income from self-employment and property, before any allowances or expenses. It is your turnover, not your profit. Illustrative: a locum on £400 a day working 180 days bills £72,000. After £14,000 of genuine expenses the profit is £58,000 — but the qualifying income is the £72,000, so the £50,000 threshold was crossed by a wide margin. A locum working 130 days at £400 bills £52,000 and is still over it on profit of perhaps £40,000.

The second is that HMRC works from the previous year's return. The 2024/25 return decided whether you were mandated from 6 April 2026, which means the obligation was fixed by a return filed before most people had thought about it.

A limited-company locum is out of scope entirely. Making Tax Digital for Income Tax applies to sole traders and landlords, not to companies. That is a real consideration in the structure decision, though it is a long way from the only one, and exemptions exist on grounds including digital exclusion.

The quarterly deadlines, and why they are not quarters

Update period	Deadline
6 April to 5 July	7 August
6 April to 5 October	7 November
6 April to 5 January	7 February
6 April to 5 April	7 May

Each period runs from 6 April, so every update restates the year to date rather than reporting three fresh months. That is helpful once you see it: a figure corrected in the third update carries forward, and there is no need to amend the earlier one. Updates can be sent from the end of the period to the deadline, and up to ten days early where no further transactions are expected. The Making Tax Digital guide for locum vets covers the mechanics, and every date is on the veterinary tax calendar.

A locum's fee arrives gross from an independent and net of PAYE from a corporate branch. Both are correct.

Locum veterinary work and IR35

The tax on the money

What a self-employed locum actually pays

Income tax on profits at 20%, 40% and 45% on the 2026/27 bands, with a personal allowance of £12,570 tapering by £1 for every £2 of income above £100,000. Then Class 4 National Insurance at 6% between £12,570 and £50,270 and 2% above £50,270. Stacked, the marginal cost of the next pound of profit is 42% above £50,270 and 47% above £125,140.

Class 2 National Insurance is voluntary at £3.65 a week, and self-employed profits above the £7,105 Small Profits Threshold give you the National Insurance credit without paying anything. Paying it voluntarily only makes sense where your profits fall below that threshold and you want to protect your contribution record.

Illustrative only. A locum bills £72,000 and has £14,000 of allowable expenses, so profit is £58,000. Income tax: nothing on the first £12,570; 20% on the next £37,700 = £7,540; 40% on the remaining £7,730 = £3,092; total £10,632. Class 4: 6% on (£50,270 − £12,570) = £2,262, plus 2% on £7,730 = £155; total £2,417. The bill is £13,049, take-home £44,951, and the amount to set aside is about £1,087 a month. Run your own with the locum take-home calculator.

Expenses that genuinely apply to clinical locum work

RCVS registration — £431 for 2026–27, due on or before 30 April 2026. Paid between 1 and 31 May it is £468, a £37 late fee, and non-payment by 31 May means removal from the Register.
Professional indemnity insurance in your own name — see below, because this is the one worth spending time on.
Travel between engagements, and the mileage or vehicle costs of getting to a practice that is not a permanent workplace.
Continuing professional development, course fees and the associated travel.
Clinical equipment — your own stethoscope, loupes, instruments. Within the Annual Investment Allowance where it is capital rather than consumable.
Accountancy, software and the cost of complying with Making Tax Digital.

What we will not do is publish a list of things that might be allowable in some circumstances. The commercial conventions of locum work — agency versus direct engagement, day-rate norms, notice, mileage and accommodation practices — are not documented in any primary source, so anyone quoting you profession-wide figures for them has made them up.

The point most locums have not been told

The practice's insurance probably does not cover everything you need

The RCVS Code requires a veterinary surgeon to ensure that all their professional activities are covered by professional indemnity insurance or equivalent arrangements. Its supporting guidance then says something specific about locums: they should have particular regard to this issue when carrying out locum work, because although the practice's insurance is likely to provide cover for negligence claims, it may not provide any other type of cover.

That sentence is worth reading twice. It is not saying the practice's policy is inadequate for negligence. It is saying that negligence is probably all it does. Representation at an RCVS concerns investigation or a disciplinary hearing is the obvious gap — not a requirement of the Code, but insurable separately, and not something a host practice's policy will usually reach. A locum covering six practices in a quarter is relying on six policies they have not read.

Three other regulatory points attach to you personally rather than to the practice, and they travel with you between engagements:

The 24-hour duty. Code paragraph 3.1 requires all veterinary surgeons in practice to take steps to provide 24-hour emergency first aid and pain relief according to their skills and the situation. "Take steps" does not require personal continuous provision, but clients must be directed to appropriate alternative services.
"Under care". Since 1 September 2023 an animal is under your care when you are given, and accept, responsibility for its health — a physical examination is no longer required to take an animal under care. A clinical assessment is one that gives you enough information to diagnose and prescribe safely. Physical examination is still required for suspected notifiable disease, for antimicrobials in non-agricultural animals and for controlled drugs on first prescription, other than in exceptional circumstances. This was a change to RCVS guidance, not to legislation.
The 24/7 examination obligation attaches to the vet who accepted responsibility, not to the practice — which matters directly where a locum prescribes a POM-V and then leaves at the end of the week.

Scope

The CMA Order does not apply to you personally. Its obligations fall on veterinary businesses — those operating first opinion practices, out-of-hours centres, referral centres, crematoria, laboratories, online pharmacies and pet care plans. A locum engaged by a practice is not one. But a sole-practitioner practice is a veterinary business, and a Small one, so if you have your own practice rather than covering other people's you are inside the Order. What that involves is on the CMA compliance page.

What you get

The whole thing handled, on a fixed monthly fee

Accounts and self assessment

Prepared from your records with the expenses that actually apply to clinical locum work, and filed on time, with the liability known well before it is due.

Making Tax Digital

Quarterly updates on the cumulative periods, the final declaration, and software set up so the four deadlines are a report rather than a project.

The MTD guide

IR35 position, documented

Which regime each engagement falls into, Status Determination Statements collected and checked, and CEST output kept with the inputs that produced it.

IR35 for locum vets

Company work if you have one

Company accounts, corporation tax, payroll and the extraction arithmetic on the new dividend rates — including whether the company is still worth having.

Incorporation

What to set aside

A monthly figure for tax rather than a January surprise, recalculated as the year's day rates and days worked actually land.

Take-home calculator

The dates

Self assessment, payments on account, quarterly updates, the RCVS renewal on 30 April — one calendar, and a reminder before each.

The calendar

Locum questions

Common questions from locum vets

Does IR35 apply to me as a locum vet?

It depends on the size of the practice engaging you, not on anything about you. Where the client is small, Chapter 8 of ITEPA 2003 applies and your own company decides your status and carries the tax risk. Where the client is medium or large, Chapter 10 applies: the client determines your status, must issue a Status Determination Statement, and the fee-payer operates PAYE on your fee. Since 76% of veterinary businesses own just one first opinion practice, almost every independent is a small client, and all six large veterinary groups are medium or large. A locum covering both in the same tax year is genuinely in two different regimes at once.

Did the April 2025 company size thresholds change who has to assess my status?

Eventually, but not yet. From 6 April 2025 two of the three Companies Act size criteria rose: turnover to more than £15 million and balance sheet total to more than £7.5 million, from £10.2 million and £5.1 million. The 50-employee limit is unchanged. HMRC's own manual at ESM10006A is explicit that the earliest tax year the transitional provision can affect a client is 2027/28, because the earliest filing date for an accounting period beginning on or after 6 April 2025 falls in January 2027. So for now, the practices that were medium or large still are, and the rise changes nothing about this tax year.

Am I inside Making Tax Digital for Income Tax?

If you are self-employed as an individual, quite possibly. Mandation started on 6 April 2026 for anyone with qualifying income over £50,000 in 2024/25, extends to over £30,000 from 6 April 2027 and over £20,000 from 6 April 2028. Qualifying income is gross income from self-employment and property before any allowances or expenses — your turnover, not your profit — which is why a locum on a good day rate crosses the threshold long before their profit suggests it. A locum operating through a limited company is out of scope entirely, because Making Tax Digital for Income Tax applies to sole traders and landlords, not to companies.

When are the quarterly updates due?

7 August, 7 November, 7 February and 7 May. The important feature is that the periods are cumulative from 6 April rather than discrete quarters: the first covers 6 April to 5 July, the second 6 April to 5 October, the third 6 April to 5 January and the fourth the full year to 5 April. Each update restates the year to date, so a correction in one quarter carries forward instead of needing an amendment. You can send an update any time between the end of the period and the deadline, and up to ten days early if you expect no further transactions. The final declaration replaces the old return.

Is the host practice's insurance enough for a locum?

Probably not on its own, and this is the single most useful practical point on this page. The RCVS Code requires a veterinary surgeon to ensure all their professional activities are covered by professional indemnity insurance or equivalent arrangements. Its guidance then warns locums specifically to have particular regard to this when doing locum work, because although the practice's insurance is likely to provide cover for negligence claims, it may not provide any other type of cover. Representation at an RCVS concerns or disciplinary process is the obvious gap: it is not required, but it can be insured separately, and the practice's policy will not usually reach it.

Can I claim my RCVS registration fee against tax?

If you are self-employed it is an expense of your trade in the normal way. If you are employed, there is a specific statutory deduction: section 343(2) of ITEPA 2003 makes deductible a fee for entry or retention of a name in the register of veterinary surgeons and in the supplementary veterinary register, and HMRC's guidance at EIM32892 confirms it. Note what that provision names: the registers themselves. It does not name professional associations, and whether a subscription to a membership body qualifies is a separate question turning on that body's own approved status, so do not assume it follows.

Ready when you are

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