Status first
It depends on the working arrangement rather than on the invoice: control, a genuine right of substitution, financial risk, and mutuality of obligation beyond the individual booking. A locum moving between practices on their own terms looks very different from someone covering the same chair every Thursday for three years.
Making Tax Digital
Qualifying income is total income from self-employment and property before expenses. Employment income through PAYE, partnership profit shares, dividends including from your own company, the State Pension and private pensions are excluded. HMRC writes to those in scope but states plainly that checking remains your responsibility.
Common questions
Am I employed or self-employed?
It depends on the working arrangement rather than the invoice. Control over how and when the work is done, a genuine right of substitution, who carries the financial risk, and whether there is mutuality of obligation beyond the individual booking. A locum moving between practices on their own terms looks very different from someone covering the same chair every Thursday for three years — and if your pattern has drifted towards the second, it is worth reviewing before somebody else does.
Does Making Tax Digital reach me?
If you are a sole trader, the timing depends on turnover rather than profit. Qualifying income is total income from self-employment and property before expenses. £50,000 in 2024-25 means MTD from 6 April 2026; £30,000 in 2025-26 means April 2027; £20,000 in 2026-27 means April 2028. The test year is two years before the start year. HMRC writes to those in scope but says explicitly that checking remains your responsibility. Do not wait for the letter; by then the qualifying year is already history.
What counts towards that threshold?
Self-employment and property income before expenses. Employment income through PAYE, your share of partnership profit as an individual partner, dividends including from your own company, the State Pension and private pensions are all excluded. The trap is that it is measured before expenses, so a locum who thinks of themselves as earning their profit figure can be well over a threshold they believed they were under. Property income counts towards it too, which catches people out. The classification of the setting decides it, not the fact of travelling.
Is a limited company worth it?
It depends on your income level, how much you need to draw, and how much administration you are willing to carry. Corporation tax is 19% to £50,000 with marginal relief above, but the comparison only means something once dividend tax and the running cost are in it. Below a certain profit the admin outweighs the saving, and we will tell you where that line falls for you rather than selling you a structure. For many locums the admin outweighs the saving until income is well established.
Do I need to worry about the practice's VAT position?
Not directly — it is the practice's obligation, not yours. But it is worth understanding, because whether dispensing at a practice you work in is treated as exempt can depend on whether a qualified optician carries it out or directly supervises it. If you are the qualified person on site, you are part of how that practice satisfies the test, and it is reasonable to know what is being relied on. It matters commercially too: a practice relying on you has a reason to keep you.