UK Locum Optometrists, Are You Accidentally Handing HMRC a 60% Paycheck?

If you’re a locum optometrist in the UK, your biggest financial risk isn't a slow clinic day—it’s the Self-Assessment deadline.

As a self-employed professional, you are the tax collector. That impressive daily rate landing in your bank account? It’s an illusion. None of that cash is truly yours until you’ve settled your tab with the government. Every day you postpone sorting your accounts, the financial ground beneath you gets shakier.

The 4-Step Breakdown: From Income to Tax

Forget complex spreadsheets for a moment. To protect your earnings, you only need to master this four-step sequence:

1. INCOME: Every penny earned from your locum shifts (e.g., £50,000).
2. MINUS EXPENSES: Money spent purely to do your job—your "shield" against tax (e.g., £5,000).
3. EQUALS PROFIT: This is the only number HMRC actually cares about (e.g., £45,000).
4. TAXED: HMRC calculates your Income Tax and National Insurance based only on that final profit figure.

⚠The "Double-Billing" Ambush

The real shock for new locums isn't just the tax rate; it’s a system called "Payments on Account."

If your first tax bill is large enough, HMRC won’t just ask for last year's tax. They will demand an extra 50% upfront as an advance payment for the following year.

The Result: Your first January deadline can feel like a 150% tax bill. If you haven't been setting money aside from day one, this can be a catastrophic financial ambush.

Your Escape Route: Allowable Expenses

You can legally shrink your taxable profit by claiming "Allowable Expenses." These aren't just costs; they are tax-deductible shields. Are you claiming everything you should?

• Professional Fees: GOC fees and indemnity insurance are business expenses, not personal costs.
• Travel: Every mile logged is worth 45p in tax relief.
• Maintenance: Car repairs and equipment costs related to your work.

Every pound claimed is a pound snatched back from the taxman’s grasp.

The Ultimate Power Move: Limited Companies

Most locums start as Sole Traders, but once you cross the £50,000 income threshold, it’s time for a strategy shift.

Forming a Limited Company can unlock sophisticated ways to keep more of your money. By swapping high personal Income Tax for a lower Corporation Tax and paying yourself via a strategic mix of salary and dividends, you could significantly lower your overall tax burden.

The Best Investment You’ll Ever Make

The biggest money-saver in your career isn't a spreadsheet—it's a specialist accountant. A trusted recommendation will save you more time, stress, and hard-earned income than you could ever manage alone.

Stop guessing and start protecting your paycheck.