Liz Densley is medical specialist partner with Sussex Chartered Accountants, Honey Barrett, and is secretary of AISMA (the Association of Independent Specialist Medical Accountants). Contact her at liz.densley@honeybarrett.co.uk.
Recently we have seen examples of HMRC asking to see locum mileage logs and refusing claims without them. So please try to keep a mileage log of all practice related journeys. It is much easier to take out what turns out not to be deductible, than to try to recreate information that wasn’t retained in the first place.
A mileage log can be a notebook kept in the car; a spreadsheet or a phone app that calculates journeys that you can annotate.
What if you have not kept a log?
For home to GP surgeries, it is easy enough to ‘google’ journeys to find the mileage. Visits are much harder if you haven’t retained records. Some surgeries’ computer systems can produce a printout of visits by doctor, from which you can then work out the mileage. This might work for salaried doctors, but the practices are likely to be less enthusiastic hunting out the information for irregular locums.
Don’t forget to include other travel in the course of work – such as for training courses. If they are not local, that can be a noticeable amount. Salaried doctors will not be able to claim it themselves; they will need to try to get reimbursement from the practice.
If the pattern of work has not changed then a sample period might be sufficient but this is only likely to work for salaried doctors’ visits – and if HMRC want to do it by the book, it still may not be enough. Locum work is unlikely to ever be settled enough for a sample period of mileage log to be representative – so doctors in that position need to get into the habit of keeping a regular log.
Self-employed doctors may usually claim a mileage rate similar to salaried GPs, but if their turnover exceeds £81k (for 2014-15) they should claim a proportion of total car running costs.
Salaried GPs
As an employee, probably not; it's not usual practise in any employment to charge for mileage to and from work. However, there may be an allowance in your contract for use of your car for visits, or if your practice requires you to travel to certain meetings to represent the practice.
Locum GPs
If you're a locum GP then you can charge for mileage to and from your place of work and for visits too if you want to - some locums do, some don't. When you charge for mileage, it's not just the fuel you're charging for - think of the tax, insurance, oil, servicing bills, wear-and-tear, tyres and the time taken to physically get there etc. What you [successfully] charge is entirely up to your negotiations with your employing practice.
A decision on whether or not to charge depends on how much it's actually costing you vs both the hassle of working it all out plus the 'perceived pettiness' by the practices that may ultimately lead them to booking someone else.
See also
Locum GP claims will depend on the pattern of their work. If they are ‘itinerant workers’ – so that they work at different places from day-to-day with no discernible pattern, then it should be possible to argue that the main place of work is home – the base from which the business is run. This should make all journeys to surgeries allowable.
If however there is a pattern claims will be restricted. For example:
- Dr L is a freelance locum. He has a number of regular jobs. He covers at surgery A on Mondays, does 2 days a week at surgery B and the 4th and 5th days are totally variable. It is likely that surgery A and surgery B become ‘workplaces’ so that home to each of those premises will be a personal journey. The 4th and 5th days should fall within the itinerant rules so that home to surgery will be deductible.
Sometimes the pattern will not be obvious in advance. A short spell of locum work may develop into something more regular (at this stage there is a risk that the locum is no longer freelance in respect of that placement and may need to become salaried, but that is beyond the scope of this article).
Load More
Recently we have seen examples of HMRC asking to see locum mileage logs and refusing claims without them. So please try to keep a mileage log of all practice related journeys. It is much easier to take out what turns out not to be deductible, than to try to recreate information that wasn’t retained in the first place.
A mileage log can be a notebook kept in the car; a spreadsheet or a phone app that calculates journeys that you can annotate.
What if you have not kept a log?
For home to GP surgeries, it is easy enough to ‘google’ journeys to find the mileage. Visits are much harder if you haven’t retained records. Some surgeries’ computer systems can produce a printout of visits by doctor, from which you can then work out the mileage. This might work for salaried doctors, but the practices are likely to be less enthusiastic hunting out the information for irregular locums.
Don’t forget to include other travel in the course of work – such as for training courses. If they are not local, that can be a noticeable amount. Salaried doctors will not be able to claim it themselves; they will need to try to get reimbursement from the practice.
If the pattern of work has not changed then a sample period might be sufficient but this is only likely to work for salaried doctors’ visits – and if HMRC want to do it by the book, it still may not be enough. Locum work is unlikely to ever be settled enough for a sample period of mileage log to be representative – so doctors in that position need to get into the habit of keeping a regular log.
Self-employed doctors may usually claim a mileage rate similar to salaried GPs, but if their turnover exceeds £81k (for 2014-15) they should claim a proportion of total car running costs.
Load More
Salaried GPs may claim for journeys undertaken wholly in the performance of their duties. Where the practice reimburses a doctor for visits (pretty rare!), then salaried GP mileage reimbursements up to 45p per mile (assuming less than 10k miles pa) are tax free. Payments in excess of that (sometimes seen in payments by hospital trusts) will be treated as taxable benefits and should be shown on form P11d at the end of the year, and must be recorded on the employment pages of the tax return.
If the practice reimburses less than 45p per mile, the difference can be claimed as an expense of employment. If there is no reimbursement at all, the then full 45p per mile can be claimed as an expense of employment. Where miles exceed 10k p.a. then the reimbursement rate drops to 25p.
The above rates relate to car travel; motorcycles can be reimbursed/claimed at 24p; cycles at 20p.
Allowable journeys for salaried doctors would include patient visits, meetings (necessary ones as part of the employment), and travel between different sites, but see the caveat below.
Home to work journeys are not allowable.
Additional mileage may be claimed in restricted circumstances such as:
- Dr D is employed by multi-site practice A to work at surgery X. If Dr D is asked to work at surgery Y for a limited time (perhaps to cover a maternity leave), then temporary travel from home to another place of work for an intended period of less than 2 years will be treated as allowable.
Note on the other hand that if Dr E was employed on a temporary basis for the maternity leave mentioned above, home to work mileage would not be allowed because surgery Y would be his main (and indeed only) workplace.
Travel between sites cannot be claimed in the following circumstance:
- Dr D is still employed by practice A at surgery X. He lives close to surgery Y and pops in each day on his way to work to pick up post. This does not make the journey between the two surgeries a business journey.
- Dr D is still employed by practice A. He works Mondays and Tuesday at surgery X and Wednesday and Thursday at surgery Y. These are two separate places of employment and travel between them or from home to work for either of them is not deductible.
Load More
Locum GP claims will depend on the pattern of their work. If they are ‘itinerant workers’ – so that they work at different places from day-to-day with no discernible pattern, then it should be possible to argue that the main place of work is home – the base from which the business is run. This should make all journeys to surgeries allowable.
If however there is a pattern claims will be restricted. For example:
- Dr L is a freelance locum. He has a number of regular jobs. He covers at surgery A on Mondays, does 2 days a week at surgery B and the 4th and 5th days are totally variable. It is likely that surgery A and surgery B become ‘workplaces’ so that home to each of those premises will be a personal journey. The 4th and 5th days should fall within the itinerant rules so that home to surgery will be deductible.
Sometimes the pattern will not be obvious in advance. A short spell of locum work may develop into something more regular (at this stage there is a risk that the locum is no longer freelance in respect of that placement and may need to become salaried, but that is beyond the scope of this article).
Salaried GPs may claim for journeys undertaken wholly in the performance of their duties. Where the practice reimburses a doctor for visits (pretty rare!), then salaried GP mileage reimbursements up to 45p per mile (assuming less than 10k miles pa) are tax free. Payments in excess of that (sometimes seen in payments by hospital trusts) will be treated as taxable benefits and should be shown on form P11d at the end of the year, and must be recorded on the employment pages of the tax return.
If the practice reimburses less than 45p per mile, the difference can be claimed as an expense of employment. If there is no reimbursement at all, the then full 45p per mile can be claimed as an expense of employment. Where miles exceed 10k p.a. then the reimbursement rate drops to 25p.
The above rates relate to car travel; motorcycles can be reimbursed/claimed at 24p; cycles at 20p.
Allowable journeys for salaried doctors would include patient visits, meetings (necessary ones as part of the employment), and travel between different sites, but see the caveat below.
Home to work journeys are not allowable.
Additional mileage may be claimed in restricted circumstances such as:
- Dr D is employed by multi-site practice A to work at surgery X. If Dr D is asked to work at surgery Y for a limited time (perhaps to cover a maternity leave), then temporary travel from home to another place of work for an intended period of less than 2 years will be treated as allowable.
Note on the other hand that if Dr E was employed on a temporary basis for the maternity leave mentioned above, home to work mileage would not be allowed because surgery Y would be his main (and indeed only) workplace.
Travel between sites cannot be claimed in the following circumstance:
- Dr D is still employed by practice A at surgery X. He lives close to surgery Y and pops in each day on his way to work to pick up post. This does not make the journey between the two surgeries a business journey.
- Dr D is still employed by practice A. He works Mondays and Tuesday at surgery X and Wednesday and Thursday at surgery Y. These are two separate places of employment and travel between them or from home to work for either of them is not deductible.
It's very unlikely that you'll need to register for VAT as a GP. There is a wealth of information here on HM Revenue & Customs website, and worth having a word with your accountant.
Fortunately we work closely with Honey Barrett, specialist accountants, who have pulled together a whole load of information for you.
IR35 ‘intermediary legislation’ and public sector employment for GP locums
In this FAQ, specialist medical accountant Liz Densley from Honey Barrett accountants explains:
- How the rules for salaried GPs and self-employed GP locums are different.
- "Wholly, exclusively and necessarily" - why 'necessarily' is tricky to interpret.
- How a new qualification is treated differently.
- Beware of 'holiday' courses.
- How to claim if you are both salaried and self-employed.
Go to FAQ
Load More
Confused by Type-2 Self-Assessment forms?
With the deadline for completion of Type 2 certificates by the end of February, we thought we’d cover some of the questions we’ve been asked…
Read moreTaking account – is having an accountant a luxury or a necessity?
Are you confident that you can keep up to date with all the changes in tax law, practice, tax tribunals etc? It’s hard enough when…
Read morePension tier and indemnity non-tax thresholds and take-home pay
My last article looked at tax thresholds which can affect GPs. One of our readers pointed out that I had not included non-tax thresholds which…
Read more
Is my pay all going on income tax?
Liz Densley is often get asked ‘Is it worth working harder and earning more? Or am I paying it all in income tax?’ Here she…
Read moreComputer says no – GP locum mortgages
After a flood of clients taking out or renewing mortgages recently, Liz Densley explains some simple steps you can take to make sure you get…
Read moreStart planning now for next year’s tax
It’s not long until the end of the tax year - what should you be thinking about? Have you used your full ISA allowance? Are…
Read more
Sort your tax in time for Christmas
Before you spend all your savings on Christmas, do you know what tax you are going to have to pay in January? If you haven’t…
Read moreTo sell a house
Capital gains tax can cast a shadow over selling your house, but there may be a silver lining to this particular cloud. We’ve recently come…
Read moreIR35 intermediary legislation: turning a sow’s ear into a silk purse
What is IR35 'intermediaries legislation' The IR35 intermediaries legislation has been in force for many years, but up until April 2017, if they were trading through…
Read more
Where the nhs pension scheme gets really complicated
Liz Densley describes the complications and pitfalls of keeping accurate records regarding the NHS pension scheme. Problem area We’re now well into the season of…
Read moreIR35 ‘intermediary legislation’ and public sector employment for GP locums
The above phrase is striking fear into the hearts of locum GPs and practice managers. IR35 is tax legislation that is designed to combat tax avoidance by any…
Read moreAutumn statement brings added uncertainty to limited company locum GPs
Don't just take our word for it ...I wanted to share...how AMAZINGLY GOOD the new NASGP online invoicing system (LocumDeck) is*!! It is so good…
Read more
Don’t leave your accounts until the last minute
Hopefully everyone who needs to do a tax return managed to do it before the deadline, but what lessons can we learn for next year?…
Read moreIndemnity inflation payments for locum GPs
NHS England has, further to its GP Indemnity Review into compensate for 'indemnity inflation', has now said: The payment "...is intended to be used for all GP…
Read moreGive and take – what locum GPs can claim for tax
It is not easy to decide what is and what isn’t claimable for tax purposes. The tables set out below give an indication, it is…
Read more
Locuming as a limited company
In recent years we have seen more and more GPs set themselves up as limited companies without taking advice. I’d like to set out some…
Read moreWhen ill-health causes financial and tax problems
Ill-health can lead to financial stress and disorganisation. Accountant Liz Densley explains how can you minimise this. Before ill-health strikes: Know what sick pay you…
Read moreNew tax rules with 2016 budget
The 2016 budget announcement means a few changes that could affect sessional GPs. The headline change announced in the Budget that might affect GPs is…
Read more
Why do you need an accountant?
Do you want to risk getting your tax wrong, and possibly incurring penalties or even getting a criminal record? Or worry about what is due…
Read moreRental properties – good news and bad
Many doctors have rental properties – either where original homes have been rented out or as investments in ‘buy to lets’. Recent changes in tax…
Read moreClaiming for GP travel expenses
This has become an extremely complex area in recent years and a recent tax case, concerning a consultant, which restricted mileage claims, will have repercussions…
Read more
Summer 2015 Budget Update
By the time this is published, much will have been written about the planned Budget changes – but here is a brief summary of some…
Read moreAll change with National Insurance contributions
I have often mentioned the National Insurance contribution (NIC) problems that can arise when a doctor has both a salaried position and freelance work. It applies mainly…
Read moreThe basics of inheritance tax
Even if you think it is too early for you to be worrying about inheritance tax, it may well apply to your parents (or even…
Read more
HMRC enquiries into tax
Self assessment works on a ‘process now, check later’ basis. So when you submit your self assessment tax return, HMRC will normally just accept it…
Read moreRegistering as self-employed
Who these days doesn’t have a portfolio career? Even if you’re not technically locuming at the moment, it’s pretty likely there will be opportunities over…
Read moreGP workforce uncertainty; plan your GP career
Recently, I was mulling over the latest statistics about GPs in the South East, and the age ranges of GPs, and found an interesting statistic…
Read more
GP federations – how might they affect you?
There is plenty of debate about GP practices forming GP federations in order to create efficiencies, save costs and bid for extra services. Is this a threat…
Read moreStopping self-employment
I had an enquiry from a NASGP member recently about the tax effect of stopping self employment. This principle affects both locum and partners in…
Read moreLooming tax deadlines
31st October For the few doctors who complete paper tax returns, the deadline for submission of the form is 31st October and automatic penalties will…
Read more
Setting up a limited company for locum work for GPs
Read moreGP partner becoming a locum – the tax and financial implications.
In recent times we have seen more partners deciding that the pressures of partnership are too much and preferring a theoretically more relaxed career as…
Read moreLocums and the new rules for collection of employer superannuation
Readers will all be aware that from 1st April the rules are changing such that the practices will become responsible for the payment of employer…
Read more
Tax implications of partnership vs salaried GP
So if you are ready to settle down in one practice, what are the pros and cons of partnership vs salaried GP in tax terms? As…
Read moreNASGP Christmas Quiz
To keep the brain cells exercised over the Christmas period, here are some tax related questions. I hope you all have a good Christmas break…
Read morePaying tax as a locum GP
Tax avoidance has been a prominent topic in the news in recent weeks, with reports of high earners paying minimal tax. What is the background…
Read more