Locum Vet Tax UK 2026/27: Self-Employed, Agency PAYE and Practice Structures
How locum veterinary surgeons and vet nurses are taxed in 2026/27 — self-employed vs agency PAYE, IR35 considerations, and allowable expenses like RCVS fees and indemnity insurance.
How Locum Vets Get Paid
Locum veterinary work covers a spread of arrangements, and the correct tax treatment follows the substance of the working relationship rather than the job title:
- Self-employed sole trader: the vet invoices practices or a locum agency directly, sets their own day rate, and has meaningful control over which shifts and practices they accept.
- Agency PAYE: the locum is placed by an agency that deducts income tax and NI at source, similar to a temporary employee.
- Limited company (personal service company): the vet invoices through their own company, which is subject to IR35 rules determining whether the engagement should be taxed as if it were employment.
Because veterinary locum work often involves attending a practice's own premises, using the practice's equipment, and following a rota set by the practice, IR35 status genuinely needs case-by-case assessment for limited company locums — the more control a practice exercises over hours, methods and equipment, the stronger the case that an engagement falls inside IR35.
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- RCVS annual retention fee and any specialist register fees.
- Professional indemnity insurance, essential given the clinical risk inherent in veterinary work.
- CPD courses maintaining or updating existing clinical skills (a genuinely new qualification, like a new specialist certification from scratch, may be treated as a capital cost rather than a straightforward deduction).
- Portable equipment carried between practices — some locums bring their own diagnostic or surgical kit.
- Mileage between different practice locations.
- Locum agency commission, where relevant.
- Scrubs, protective clothing and laundering costs specific to clinical work.
Mileage Between Practices
A locum vet covering several practices in a week — perhaps a small animal practice on Monday, an equine call-out on Wednesday, a different small animal clinic on Friday — is travelling between temporary workplaces, not commuting to one fixed base. HMRC's approved mileage rate applies: 45p per mile for the first 10,000 business miles in the tax year, 25p per mile after that, covering fuel, insurance, wear and depreciation in one flat figure.
VAT: A Realistic Consideration for Busy Locums
Unlike many other self-employed trades where the £90,000 VAT registration threshold is rarely reached, locum veterinary day rates are high enough that a busy, full-time self-employed locum vet can realistically approach or cross this threshold within a working year. It's worth tracking rolling 12-month turnover carefully rather than assuming, as many lower-earning self-employed people can, that VAT simply won't apply.
National Insurance and Structuring the Work
Self-employed locum vets pay Class 4 National Insurance at 6% on profits between £12,570 and £50,270, and 2% above that, on top of income tax at standard rates. Class 2 NI has effectively been abolished for those with profits above £7,105, with voluntary contributions of £3.65 a week available below that to protect State Pension entitlement.
A limited company becomes genuinely attractive for locum vets with high, consistent day-rate income and a substantial proportion of outside-IR35 engagements, since a salary/dividend structure can beat sole trader taxation once profits move well past £50,000. Where most bookings are inside IR35, the limited company route loses much of its tax advantage, since income is effectively taxed similarly to employment regardless of the corporate wrapper.
Self-employed sole trader locum: simplest structure, full expense deductions, Class 4 NI and income tax on profit.
Limited company locum: potential tax efficiency on outside-IR35 work via salary/dividends, but IR35 assessment needed per engagement, plus company admin costs.
Frequently asked questions
Are locum vets self-employed or employed?
It depends on the arrangement. Locums who invoice practices directly, control their own hours and can work for multiple practices are usually self-employed. Locums placed through an agency on terms closer to temporary staffing, or working via a personal service company under an arrangement caught by IR35, are taxed differently.
What expenses can a self-employed locum vet claim?
Typical allowable expenses include RCVS annual retention fee, professional indemnity insurance, CPD courses maintaining existing skills, veterinary equipment carried between practices, mileage between practices, and accountancy fees.
Does IR35 apply to locum vets working through a limited company?
It can. If a locum vet operates through a personal service company and the actual working arrangement with a practice looks like disguised employment — set hours, practice-provided equipment, no real ability to send a substitute — IR35 rules may apply, and for engagements with certain organisations the end client may be responsible for the status determination.
Can a locum vet claim mileage between multiple practices?
Yes, at 45p per mile for the first 10,000 business miles each tax year and 25p per mile after that, for genuine travel between different temporary practice locations, since this isn't ordinary commuting to one fixed workplace.
Do locum vets need to register for VAT?
Once taxable turnover exceeds £90,000 in a rolling 12-month period. Given typical UK locum day rates, a busy full-time locum vet can approach or exceed this threshold faster than many other self-employed professions.
Should a locum vet trade through a limited company?
It can be tax-efficient for higher earners with mostly outside-IR35 engagements, using a salary/dividend split, but the benefit shrinks considerably if most work is inside IR35, where tax is deducted at source in a way similar to PAYE.
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