How Do Locum Optometrist Taxes Work in the UK? A Guide for Optometrists in 2025

By The Optom Coach – helping optometrists in the UK transition smoothly from employed to locum work. Visit www.theoptomcoach.com.

Introduction

One of the biggest changes when moving from an employed role to locum optometry is managing your own taxes. As an employee, your employer handles PAYE (Pay As You Earn). But as a self-employed locum optometrist in the UK, you become responsible for declaring your income, paying the right amount of tax, and staying compliant with HMRC.

If you’re considering locuming, understanding how locum taxes work in the UK is essential for protecting your income and avoiding penalties.

1. Employment Status: Sole Trader vs Limited Company

Locum optometrists typically work in one of two ways:

• Sole Trader
• You register with HMRC as self-employed.
• File an annual Self-Assessment tax return.
• Pay Income Tax and Class 2 & Class 4 National Insurance Contributions (NICs).
• Simple to set up and manage.
• Limited Company
• You set up a company via Companies House.
• You are both a director and shareholder of the company.
• The company pays Corporation Tax, and you pay yourself via a mix of salary and dividends.
• Offers potential tax efficiency but comes with extra admin and accounting costs.

Most new locum optometrists in the UK start as sole traders, then consider a limited company when their income grows.

2. What Taxes Do Locum Optometrists Pay?

As a self-employed locum in the UK, you need to pay the following:

• Income Tax
• Taxed on profits (income minus allowable expenses).
• 2025/26 tax bands (England, Wales, NI):
• Personal Allowance: £12,570 (0%)
• Basic Rate: 20% (£12,571 – £50,270)
• Higher Rate: 40% (£50,271 – £125,140)
• Additional Rate: 45% (over £125,140)
• In Scotland, different bands apply.
• National Insurance Contributions (NICs)
• Class 2: Flat weekly rate (if profits > £6,725).
• Class 4: 9% on profits between £12,570–£50,270, and 2% above this.
• Corporation Tax (if Ltd company)
• 25% on company profits (19% for some small businesses).
• Dividend Tax (if Ltd company)
• 8.75% (basic rate), 33.75% (higher rate), 39.35% (additional rate) after the £1,000 allowance (2025/26).

3. Allowable Expenses for Locum Optometrists

The good news: you can reduce your taxable profit by claiming legitimate business expenses. Common examples in locum optometry include:

• Professional indemnity insurance.
• GOC registration fees.
• CPD courses and professional training.
• Travel to different practices (mileage, parking, public transport).
• Accountancy fees.
• Office expenses (laptop, software, mobile phone).
• Professional clothing (if required).

Keeping accurate records of expenses ensures you don’t overpay tax and makes HMRC compliance easier.

4. Deadlines and Payments

• Self-Assessment registration: Register with HMRC by 5 October after your first tax year as self-employed.
• Tax year: Runs from 6 April – 5 April.
• Online tax return deadline: 31 January following the end of the tax year.
• Payment deadlines:
• 31 January: Pay any tax owed + first “payment on account” (advance payment towards next year’s tax).
• 31 July: Second “payment on account.”

Missing deadlines results in penalties and interest, so forward planning is key.

5. IR35 and Locum Optometrists

If you work through a limited company, you may hear about IR35 – legislation designed to stop people working “like employees” but avoiding PAYE tax.

• For most locum optometrists, IR35 rarely applies, since locums typically work flexibly across multiple practices with their own clinical autonomy.
• However, always seek advice if you rely heavily on one employer or have long-term contracts.

6. Should Locum Optometrists Use an Accountant?

Yes—while you can file taxes yourself, most locum optometrists in the UK benefit from hiring an accountant.

• They ensure compliance with HMRC.
• Advise whether sole trader or limited company is best.
• Help claim all allowable expenses.
• Save you time and reduce tax liabilities legally.

7. Practical Tax Tips for Locum Optometry

• Open a separate business bank account to track income and expenses clearly.
• Save 25–30% of each shift’s income in a tax savings pot, so you’re prepared for January’s bill.
• Use accounting software like QuickBooks, Xero, or FreeAgent to log invoices and expenses.
• Stay on top of CPD and GOC compliance – these are claimable expenses and vital for ongoing work.

Conclusion & Tool Which May Help

Understanding how locum taxes work in the UK is essential for every optometrist making the move from employed to self-employed work. From deciding whether to operate as a sole trader or limited company, to tracking expenses and meeting HMRC deadlines, managing your tax efficiently is key to maximising the rewards of locum optometry.

At The Optom Coach, we help optometrists in the UK transition into locuming with confidence—not just clinically, but also in handling the business side of work with advanced digital tools. One of which is a tool which allows you to slide in your expected work patterns, even your employed pay, and it instantly generates a tax breakdown so you can see without mental gymnastics, errors or delay: Which working pattern suits which self-employed tax type the best. 👉Find it at www.theoptomcoach.com and take the stress out of locum optometry taxes.