How to record locum income for HMRC

8th November 2021 by Tori Ferguson, Honey Barrett

How to record locum income for HMRC

There are different ways to record your fee-based earnings as a GP locum – by date worked, date paid or even by date of invoice. From an HMRC perspective, the key is consistency. Choose a method and then stick to it, unless there are sound justifications for changing.

By date worked

Also known as the ‘accruals basis’ of accounting, this is possibly the most frequently used method (by many accountants at least) and means that your income and expenses are recognised and recorded in the year to which they relate. Benefits of this system are that your tax year is aligned with your “work year”. This can make it cleaner to settle up your tax liability for a year of work without having it spill over into another tax year. This can be important if you’re changing role e.g. retiring or moving into a PAYE role and you don’t want to carry over tax liability, requiring another year of self-assessment tax return.

By the date you were paid

Known as ‘cash accounting’, this means recording your income by the date you were paid. Perhaps less commonly used, it has the benefit that you only pay tax on income received. The disadvantage is that if you stop your fee-based work but receive payment in the next tax year, you will carry over your tax liability into another tax year, meaning another round of self-assessment tax returns. This may not be a welcome chore if you have retired or have moved into a PAYE role.

By date of invoice

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More advice for starting out with GP locum accounts

"I am so glad and grateful for being a member of NASGP's BOB Locum Chambers. I started with them in a critical period of my career as I was a newly-qualified GP, looking for work in a new area with a new virus hardly hitting the world and the jobs market.

NASGP chair Dr Richard Fieldhouse and Membership Support Manager Ali Lewis's help was a godsend. They introduced me to locum work in a friendly and kind manner, provided valuable support and excellent service through the ever-improving LocumDeck and NASGP website. With the help of the chambers, I received a face to face tutorial on Emis (I trained on SystmOne) and my online profile was promoted on a growing network of GP practices throughout Buckinghamshire, Oxford and Berkshire.

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