Specialist
Medical Accountants

NHS doctors are typically employed on a PAYE (Pay As You Earn) basis. This means that your employer deducts income tax and National Insurance contributions automatically from your salary. The amount of tax you pay depends on your income level and is calculated based on the UK’s progressive tax rates. Your tax code, which you can find on your payslip, determines how much tax is taken from your salary. It’s important to check that your tax code is correct to avoid paying too much or too little tax.

As an NHS doctor, you can claim tax relief on fees or subscriptions paid to approved professional bodies or learned societies if necessary. For example, subscriptions to the General Medical Council or the Royal College of Physicians can be claimed. To claim this relief, you must have paid the fees yourself without reimbursement from your employer.

You might be classified as self-employed or employed if you work locum shifts, depending on your working arrangements. As a self-employed individual, you are responsible for calculating and paying your taxes through Self Assessment. This involves keeping records of your income and allowable expenses. The locum agency or hospital will handle your taxes through PAYE if you’re employed.

Contributions to the NHS Pension Scheme are eligible for tax relief. This means the money goes into your pension before income tax is deducted, effectively lowering your taxable income. However, there’s an annual allowance for pension contributions, beyond which you may have to pay a tax charge.

If you have additional income sources, such as private practice, rental income, or investment earnings, these need to be reported to HMRC. This is usually done through a self-assessment tax return. You’ll need to pay tax on this income, potentially pushing you into a higher tax bracket and increasing your overall tax rate.

Income earned from research or teaching may be subject to income tax. However, you can deduct allowable expenses related to these activities, such as travel costs, materials, and equipment. If these activities are part of your NHS employment, they will be taxed through PAYE; if they are separate, you may need to file a self-assessment tax return.

If you’re a UK resident, you must pay UK tax on your worldwide income, including earnings from abroad. You need to declare this income on a self-assessment tax return. There are provisions to avoid double taxation if you’ve already paid tax in another country.

During maternity or paternity leave, you continue to be taxed through PAYE on any statutory pay you receive. If your income changes significantly during this period, you may end up overpaying or underpaying tax, which HMRC will reconcile.

If you believe you have overpaid tax, you should contact HMRC. You can do this online, by phone, or by writing. HMRC may also automatically reconcile your tax at the end of the tax year and refund any overpayment. You can also claim a refund for overpaid tax for the previous four years.