Take a paid session outside your contract and you are a sole trader alongside your employment from that day. Three things follow. You must tell HMRC by 5 October following the end of the tax year the first session fell in, so a session in June 2026 means registering by 5 October 2027. The profit stacks on top of your salary rather than starting a fresh allowance, so for a salaried GP already above £50,270 it is normally taxed at 40% income tax plus 2% Class 4 National Insurance. And if you want the sessions in the NHS pension, Form A has to be approved by the practice and Form B has to reach PCSE within 10 weeks of the work ending. A limited company, at 2026/27 rates, rarely earns its keep on this kind of income and costs you pension accrual.
What does registering actually involve?
You register as a sole trader and keep your PAYE post untouched. Your salaried pay, tax and Class 1 National Insurance carry on as before; the return simply reports both. gov.uk puts the deadline at 5 October following the end of the relevant tax year and says telling HMRC after it could bring a penalty.
The return is due by 31 January after the tax year ends, and that is when the tax is due too. Work done in June 2026 is not declared until January 2028, so nearly nineteen months of income can accumulate before any tax is demanded. Put money aside from the first session. The locum filing guide walks through the return boxes.
How much of each locum pound do you keep?
Roughly 58 pence, on typical salaried GP pay. The profit is added to your employment income, so it is taxed in the band your total reaches: 40% between £50,270 and £125,140 for 2026/27, and 45% above that. On top, Class 4 National Insurance runs at 6% between £12,570 and £50,270 and 2% above £50,270, so most of a salaried GP's locum profit attracts the 2% rate. Class 2 stopped being a required payment on 6 April 2024.
Profit, not turnover, is what is taxed. Indemnity for your private and non-NHS clinical work, the GMC retention fee, subscriptions to bodies on HMRC's approved List 3, relevant CPD and travel between separate engagements in a day all come off first. Mileage runs at 55p for the first 10,000 business miles in 2026/27 and 25p after that, having risen from 45p on 6 April 2026. The trip from home to the first site you work at that day is commuting and never qualifies. The expenses guide has the full list, and the locum tax calculator will size the bill.
When do payments on account start, and why does the bill double?
Once your prior year's liability exceeded £1,000 and less than 80% of your tax was collected at source. Then two interim payments fall due, 31 January and 31 July, each 50% of that prior year's liability, on top of the balancing payment for the year just filed. That is why the first serious locum year can produce a January demand around one and a half times the tax you expected.
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How do you pension the sessions?
Through the GP locum forms, and quickly. The practice approves Form A first, Form B then goes to PCSE. PCSE's own rule is that you cannot pension a period of freelance GP locum work that ended more than 10 weeks ago, and forms received after 10 weeks are rejected as not pensionable. Contributions must reach the scheme by the seventh day of the month after. There is no appeal and no late route: the accrual is simply not created.
Your contribution rate is tiered on pensionable pay, and the bands moved on 1 April 2026 while the rates stayed put. For 2026/27 they run 5.2% up to £13,259, 6.5% to £28,854, 8.3% to £35,155, 9.8% to £52,778, 10.7% to £67,668 and 12.5% above that. A band table can be corrected part way through a year, so check it rather than assume it. Separately, as a salaried GP you complete the Type 2 self-assessment form. It is filed a year in arrears against a 28 February cut-off, putting 2025/26 on 28 February 2027, and it is what gets the right tier recorded against your whole practitioner income. The Form A and Form B guide covers the mechanics.
One more measure to watch. Pension growth across the salaried post and the pensioned sessions is tested together against the £60,000 annual allowance for 2026/27, and in a defined benefit scheme it is the capitalised growth in your benefits that counts, not the contributions leaving your payslip. Unused allowance from the previous three tax years carries forward, which usually absorbs a one-off spike.
Is a limited company worth it?
For part-time locum work on top of a salaried post, usually not. The comparison at 2026/27 rates:
| Point of comparison | Sole trader alongside PAYE | Limited company |
|---|---|---|
| Tax on the profit | 40% income tax plus 2% Class 4 for most salaried GPs | 19% corporation tax up to £50,000 of profit, then 35.75% on dividends in the higher band |
| Dividend allowance | Not applicable | £500 |
| NHS pension | Pensionable via Form A and Form B | Dividends are not pensionable at all |
| IR35 | Does not apply, there is no intermediary | NHS Trust hirers determine status and operate PAYE on inside engagements |
| Salary from the company | Not applicable | Employer National Insurance at 15% above the £5,000 secondary threshold, and no Employment Allowance for a sole director |
| Making Tax Digital | In from 6 April 2026 where qualifying income exceeds £50,000 | Out, it is an income tax regime |
| Annual admin | One self assessment return | Accounts, corporation tax return, confirmation statement, payroll |
Read the table downwards rather than across. The corporation tax rate looks attractive in isolation, but money you want to spend has to come out, and dividends at 35.75% on top of a 19% charge leave little in it once accounts and payroll are paid for. You also give up pension accrual on every pound routed through the company, and for NHS Trust work the status determination sits with the hirer under Chapter 10 of Part 2 of ITEPA 2003, so inside-IR35 engagements are paid net.
The company case gets stronger in narrow circumstances: substantial private or medico-legal work that was never pensionable anyway, income you intend to retain rather than draw, or a need to keep private earnings outside pensionable pay where the annual allowance taper is in play. None of those describe an occasional Saturday session. The locum company guide works through the full case both ways.
What order should you do this in?
Register now rather than at the deadline. Set a reminder eight weeks after each block of locum work so Form B never approaches the 10-week wall. Keep a separate account and move a flat share of each payment into it. File the Type 2 form on time so your tier is right. Revisit the company question only when non-pensionable private work becomes a real share of your income, and have a specialist review the pension side alongside the tax side, because lost accrual shows up nowhere on a tax comparison.