Personal financial planning – how much should you save for tax?

29th April 2015 by NASGP

Personal financial planning – how much should you save for tax?

Perhaps the most important piece of personal financial planning that a self-employed locum GP must ensure is the amount of savings he or she is making for their income tax and national insurance liabilities. Matters are further compounded if the locum is obliged to make student loan repayments.

If we take a locum, who is in the NHS Pension Scheme and is making their monthly superannuation contributions, then the savings required for the fiscal year ended 5 April 2016, are as follows:

Net income after expenses but before Superannuation Percentage savings for income tax and NIC Percentage savings for income tax and NIC and student loan repayments
£50k 20% 26%
£60k 23% 30%
£70k 25% 32%
£80k 26% 33%
£90k 28% 35%
£100k 29% 36%

It should be stressed that the above percentage savings do not take into account any additional liabilities which may accrue on investment income such as bank or building society interest, dividends from shareholdings or rental income.

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"I fell into a salaried role post-CCT, so faced with an unexpected relocation to a completely new area of the country the thought of GP locuming was incredibly daunting.

The assistance I have received from NASGP has been invaluable. I have received excellent and patient admin support when setting up my LocumDeck account. I have enjoyed the monthly chambers meetings I have attended: this made locuming feel far less isolating.

I have easily found plentiful work and am grateful for the invoicing and pension forms being taken care of – this gives me time to focus on the clinical work or make the most of precious days off.

With the support of NASGP Locum Chambers I have filled my diary working in a variety of practices in my new area, and have now joined one practice I enjoyed locuming at on a salaried basis while I continue to do some locum work on top using LocumDeck."

Dr Joanne Wright, GP, Essex

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