Allowable Expenses for a Locum GP Company

Posted Mar 22nd, 2025

Understanding Allowable Expenses for Locum GP Companies

Running a locum GP company in the UK involves various costs, but many of these can be claimed as allowable expenses to reduce your corporation tax. According to HMRC, expenses must be "wholly and exclusively" for business purposes. This guide outlines the key expenses your locum GP company can claim, helping you save on taxes while staying compliant.

Whether you're paying locum GPs, covering travel, or investing in professional development, understanding allowable expenses is crucial. Below, we break down the categories, provide examples, and share practical tips to maximize your claims.

Important: Always keep detailed records (receipts, invoices, mileage logs) for at least 6 years to support your claims during HMRC audits. Consult a specialist accountant for tailored advice.

Categories of Allowable Expenses

• Staffing and Contractor Costs

Your locum GP company can claim expenses related to staffing, such as payments to locum GPs (including fees, salaries, or commissions), recruitment agency fees for sourcing GPs, and locum insurance premiums (e.g., for fixed overheads or substitutes). These are core operational costs, and any benefits received from locum insurance policies are treated as trading receipts if they offset these expenses.

• Office and Administrative Costs

You can claim costs like rent or lease for office space, utilities (electricity, heating, water), office supplies (stationery, printing), phone and broadband (business portion), and software subscriptions (e.g., accounting tools or medical admin platforms like LocumDeck). If you work from home, you can claim a portion of home office costs using HMRC’s simplified flat rate (£6/week) or by apportioning actual costs based on business use.

• Travel and Vehicle Expenses

Travel expenses are claimable, including mileage for business trips (e.g., to client practices, at 45p/mile up to 10,000 miles, then 25p thereafter), fuel, insurance, repairs, MOT, road tax (apportioned for business use), public transport, taxis, train fares, and parking or congestion charges. Journeys to temporary sites are allowable if there’s no fixed workplace, but commuting from home to a regular site is not. Maintain detailed mileage logs to support claims.

• Professional and Training Costs

Expenses for professional development are allowable, including professional indemnity insurance (e.g., MDU fees), subscriptions to bodies like the GMC or BMA, CPD courses, conferences, exam fees (e.g., MRCGP for maintaining roles), and training for staff (e.g., compliance or medical updates). These must relate directly to the company’s operations, and conference-related claims may include travel or accommodation if overnight stays are required.

• Marketing and Business Development

Costs for promoting your locum GP company are claimable, such as advertising (website or social media ads for GP recruitment), website development and hosting, marketing materials (brochures, business cards), and networking event fees. These are essential for client acquisition, but entertainment costs, like client meals, are generally not allowable unless exceptional circumstances apply.

• Equipment and IT

You can claim for equipment like computers, laptops, tablets, medical devices (e.g., stethoscopes if company-provided), and office furniture. Larger purchases, such as vehicles or IT setups, may qualify for capital allowances. Use the Annual Investment Allowance (up to £1m) for immediate full deductions, or depreciate other assets over time.

• Financial and Legal Costs

Expenses like accountancy and bookkeeping fees, legal fees (e.g., for contract reviews or company setup), and business-related bank charges or loan interest are claimable. This category also includes costs for IR35 compliance advice, which is critical for locum agencies to ensure contracts reflect genuine self-employment.

Other Operational Costs

Additional operational expenses include repairs and maintenance (office or equipment), PPE and medical supplies (if provided to locums), bad debts (unpaid client invoices), and pensions contributions for staff (up to a £60,000 annual allowance). Health insurance for employees is allowable, but normal meals are not claimable unless part of overnight travel.

Key Tips for Claiming Expenses

• VAT Reclaims: If VAT-registered (turnover above £90,000), reclaim VAT on expenses like office supplies and travel through quarterly returns.
• IR35 Compliance: Ensure contracts reflect genuine self-employment for locum GPs to avoid HMRC reclassification risks.
• Record-Keeping: Use software to track expenses and retain evidence for 6 years to avoid audit penalties.
• Non-Allowable Expenses: Avoid claiming personal costs (e.g., normal clothing, home-to-work commuting, fines).
• Capital Allowances: Claim relief on large purchases like vehicles or IT equipment using the Annual Investment Allowance.

Next Steps for Your Locum GP Company

Maximizing allowable expenses can significantly reduce your tax bill, but compliance is key. For the latest HMRC guidance, visit the HMRC self-employed expenses page. For personalized advice, consult a medical specialist accountant to ensure your claims align with your company’s specific circumstances.

Note: This guide is for informational purposes and is not tax advice. Rules may change, so always verify with a professional.

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