Incorporating can save higher-earning locums and partners real money — but it brings admin, and it isn't automatically the right answer.
Simple. All profits taxed as your income via self-assessment (income tax + Class 2/4 NI). No separate filing for a company. Personally liable for business debts.
Profits taxed at corporation tax rates first. You then pay yourself via salary and/or dividends — dividends taxed at lower rates than income tax and don't attract NI. Limited liability. More admin: company accounts, corporation tax return, Companies House filings.
Corporation tax is generally lower than higher/additional rate income tax. By leaving profits in the company rather than drawing them all out, and drawing a mix of modest salary plus dividends, a higher-earning locum can reduce the overall tax and NI paid — provided profits aren't all needed for living expenses immediately.
If you need to draw out most of the company's profit each year to live on, much of the saving disappears once dividend tax is applied — incorporation tends to suit those who can leave a meaningful amount of profit inside the company.
Quick and inexpensive online — a few pounds and usually same-day approval.
Required — company money must be kept separate from personal funds.
Most doctors and dentists use an accountant for this, given the interaction with IR35 and locum-specific rules.
If most of your work is via a single agency/practice on terms resembling employment, IR35 rules may mean your income is still taxed as employment income despite the company structure.
Not necessarily — it depends on your working arrangements. Genuinely self-employed locums working across multiple practices on their own terms are typically outside IR35, in which case the company structure still delivers a tax advantage. This needs an individual assessment, ideally with an accountant familiar with locum/associate medical and dental arrangements.
Generally no for the salaried NHS role itself, since that income is PAYE. A limited company can still make sense for separate self-employed income streams — locum shifts, private work, or content/writing income — run alongside the salaried role.
Check GOV.UK directly for the current corporation tax rates and thresholds (the main rate, small profits rate and marginal relief band), as these are reviewed periodically at fiscal events.