Locum Pharmacists — Tax, Expenses, and IR35 Guide

The Accounted Business Team·1 March 2026·7 min read

If you work as a locum pharmacist in the UK, you already know the flexibility is brilliant — but the tax side of things can feel like a different kind of prescription altogether. Whether you pick up shifts through an agency or work directly with pharmacies, understanding your tax obligations is essential to keeping more of your hard-earned money.

This guide covers everything you need to know about tax, expenses, and IR35 as a self-employed locum pharmacist in the 2025/26 tax year.

How Are Locum Pharmacists Taxed?

Most locum pharmacists fall into one of two categories: self-employed sole traders or workers operating through a limited company. A smaller number work via umbrella companies, but the tax treatment there is essentially the same as employment.

If you are genuinely self-employed, you will need to register with HMRC as self-employed and file a Self Assessment tax return each year. Your profits (income minus allowable expenses) are subject to Income Tax and National Insurance.

Income Tax Rates for 2025/26

Here is how Income Tax works for the current tax year:

Personal Allowance: The first £12,570 of your income is tax-free.
Basic rate (20%): Applies to taxable income between £12,571 and £50,270.
Higher rate (40%): Applies to taxable income above £50,270.

Many locum pharmacists earn above the basic rate threshold, so keeping track of every allowable expense becomes even more important at the 40% rate — every £100 of expenses saves you £40 in tax.

National Insurance Contributions

As a self-employed locum pharmacist, you will pay two types of National Insurance:

Class 2 NI: A flat rate of £3.45 per week (£179.40 per year).
Class 4 NI: 6% on profits between £12,570 and £50,270.

These are calculated as part of your Self Assessment return and paid alongside your Income Tax. For a full breakdown, see our guide on National Insurance for sole traders.

What Expenses Can Locum Pharmacists Claim?

One of the biggest advantages of being self-employed is the ability to deduct allowable business expenses from your income before tax is calculated. Here are the key categories for locum pharmacists.

Travel and Mileage

Travel between your home and a temporary workplace is an allowable expense — and since locum pharmacists rarely have a permanent workplace, most of your travel qualifies. You can claim:

Mileage: 45p per mile for the first 10,000 miles, then 25p per mile after that. This covers fuel, insurance, wear and tear, and servicing.
Public transport: Train, bus, and taxi fares to and from pharmacies.
Parking fees and congestion charges incurred while travelling to assignments.
Overnight accommodation if you are working far from home and need to stay away.

Keep a mileage log with dates, destinations, and miles driven. Our detailed guide on how to claim mileage when self-employed explains the process step by step.

Professional Fees and Subscriptions

GPhC (General Pharmaceutical Council) registration fee — this is essential to practise and fully deductible.
Royal Pharmaceutical Society membership, if you are a member.
Professional indemnity insurance — a must-have for locum work.
DBS check fees required by pharmacies.
CPD course fees and training costs that maintain or update your existing skills.

Equipment and Supplies

A dedicated work phone or a proportion of your personal phone bill.
A laptop, tablet, or computer used for managing your bookkeeping, logging CPD, or communicating with agencies.
Stationery, printer ink, and other office supplies.
Specialist reference books or digital subscriptions (such as the BNF online).

Working From Home

If you carry out administrative tasks from home — managing bookings, completing CPD records, handling invoicing — you may be able to claim a proportion of your household costs. The simplified method allows you to claim a flat rate based on the hours you work from home each month: £10 per month for 25–50 hours, £18 for 51–100 hours, and £26 for 101 hours or more. Read more in our work from home expenses guide.

Agency Fees and Commissions

If an agency deducts a fee or commission from your pay, you cannot claim this as an expense because it was never part of your income. However, if you pay a separate fee to be listed with an agency, that fee is deductible.

IR35 — Does It Affect Locum Pharmacists?

IR35 is the tax legislation designed to catch workers who are effectively employees but operate through a limited company (or another intermediary) to pay less tax. If you work through a limited company and provide your services to pharmacies via an agency or directly, IR35 is something you need to understand.

How IR35 Works in Practice

Since April 2021, medium and large businesses (including many pharmacy chains and NHS trusts) are responsible for determining your IR35 status. If they decide you fall inside IR35, tax and National Insurance are deducted at source — much like PAYE employment.

If you work for small businesses (most independent pharmacies), you are still responsible for determining your own IR35 status.

Key Factors That Determine IR35 Status

HMRC looks at the reality of the working arrangement. The main tests are:

Substitution: Could you send a qualified replacement to do the work in your place? If you genuinely have this right (and it is realistic), it points towards being outside IR35.
Control: Does the pharmacy dictate how, when, and where you work? The more control they have, the more it looks like employment.
Mutuality of obligation: Is the pharmacy obligated to offer you work, and are you obligated to accept it? If not, this points towards self-employment.

Most locum pharmacists who work on a shift-by-shift basis, choose their own assignments, and are free to turn down work have a reasonable argument for being outside IR35. However, each engagement needs to be assessed individually. Our complete IR35 guide for contractors goes into much more detail.

Sole Traders and IR35

If you work as a sole trader (not through a limited company), IR35 does not apply to you. The question instead is whether you are genuinely self-employed or actually an employee. The tests are similar, but the consequences differ. If HMRC determines you are actually an employee, the pharmacy (or agency) may owe back taxes rather than you.

VAT — Do Locum Pharmacists Need to Register?

You must register for VAT if your taxable turnover exceeds £90,000 in any 12-month rolling period. Many locum pharmacists earn below this threshold, but if you are working full-time and commanding higher rates, it is worth keeping an eye on your turnover.

One important consideration: most pharmaceutical services are exempt from VAT rather than zero-rated or standard-rated. If the majority of your income comes from VAT-exempt services, you may not be able to reclaim VAT on your business purchases. This is a nuanced area, and it is worth taking professional advice if you are close to the threshold. Our VAT registration threshold guide has more information.

Record-Keeping Tips for Locum Pharmacists

Good record-keeping saves you time, money, and stress. Here are some practical tips:

Photograph receipts immediately. Paper receipts fade, and HMRC may want to see them years later. Using an app like Penny — the AI bookkeeper inside Accounted — means you can snap a photo and have it categorised automatically.
Keep a mileage log. Record each journey with the date, start and end locations, purpose, and miles driven. A simple spreadsheet works, but dedicated apps make it even easier.
Separate your business and personal finances. Open a dedicated business bank account. It makes everything cleaner at tax time.
Track your income by source. If you work for multiple agencies or pharmacies, record each one separately. This makes it easier to reconcile payments and spot discrepancies.
Set aside money for tax. A good rule of thumb is to put 25–30% of your income into a separate savings account earmarked for your tax bill.

Payments on Account and Self Assessment Deadlines

As a self-employed locum pharmacist, you will need to make Payments on Account if your tax bill exceeds £1,000. These are advance payments towards next year's tax bill, due on 31 January and 31 July each year, each equal to half of your previous year's tax bill.

This catches many locum pharmacists off guard in their second year of self-employment, when they receive a tax bill that includes the current year's liability plus the first payment on account for the following year. Plan ahead and budget accordingly.

Key deadlines for the 2025/26 tax year:

5 October 2026: Deadline to register for Self Assessment if this is your first year.
31 January 2027: Deadline to file your online tax return and pay any tax owed.
31 July 2027: Second payment on account due.

Making the Most of Your Locum Income

Locum pharmacy is a rewarding career with genuine flexibility, but the tax side requires a bit of organisation. The good news is that once you have a system in place, it becomes second nature. Claim every legitimate expense, keep tidy records, and set money aside for your tax bill — and you will be in great shape.

Accounted helps UK sole traders stay on top of their bookkeeping and tax. Start your free 30-day trial at getaccounted.co.uk.

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