A locum doctor’s accounting problem is fragmentation: income arrives from many engagements, through agencies, direct bookings and payroll systems, sometimes all in the same month, and each arrangement has a different tax character. The accounting records that tame this are a single session log covering everything you work, an invoice and remittance file per income source, expense evidence gathered as you go, and pension paperwork filed on arrival. With those, an accountant can assemble your position accurately; without them, nobody can.
The session log: the core accounting record for locum doctors
Keep one running log, in whatever format you will actually maintain, recording for each session: date, location, engager, agreed rate, how it was booked, and whether payment came gross or through a payroll with deductions. This log is the spine of your records. It lets you invoice accurately, chase what is missing, and answer the crucial question at year end of which income belongs on which part of your tax return. Doctors who keep it daily never face the grim task of reconstructing a year from bank statements and inbox searches.
Agency, direct and payroll income are different animals
Locum work arrives under genuinely different arrangements. Some engagements pay you gross as a self-employed contractor, bringing the record duties in the GOV.UK guidance on business records if you’re self-employed. Others put you on a payroll, with tax deducted before payment and a payslip issued. Agencies may do either, and some engagements sit under special rules that determine the treatment for you. Your records must preserve which arrangement applied to each engagement: keep the booking terms, the payslips, the remittance advices and the gross invoices in separate files per engager. Merging them is the single most damaging habit in locum record keeping.
Invoicing and chasing what you are owed
For self-employed engagements, raise sequentially numbered invoices from your session log and record the date each is paid. Fragmented income means fragmented late payment: with a dozen engagers, small unpaid invoices slip through unnoticed. A monthly reconciliation of log against invoices against bank receipts catches them while the engagement is still fresh.
Digital records and quarterly updates under Making Tax Digital
Making Tax Digital for Income Tax is now being phased in for the self employed, and a busy locum is likely to be caught early, because qualifying income is measured on gross income before expenses rather than on taxable profit. Once you are in scope, the self-employed side of your records has to be kept digitally in compatible software, and you send quarterly updates through the year as well as a year end return. Check the current dates and income levels on GOV.UK, because the phasing runs across several tax years. Payrolled engagements are not part of the quarterly reporting, which is one more reason to keep the two kinds of income cleanly apart in your files.
Expenses: gather evidence, judge later
Locum work generates costs: travel between sites, indemnity, registration, exams and courses, equipment. Whether any given cost reduces your tax depends heavily on the facts, including the nature of each engagement and your working pattern, and the answer can differ between two doctors with identical spending. The GOV.UK guidance on expenses if you’re self-employed is the official reference, but the working rule is simpler: keep the receipt and a note of the work context for every cost, and let your accountant apply the correct treatment to each. Fact-dependent does not mean unknowable; it means the evidence decides.
Pension records across scattered engagements
Locum doctors interacting with NHS pension arrangements accumulate forms, certificates and statements from multiple engagements. File every piece as it arrives, engagement by engagement, and check periodically that your contributions have been recorded by the scheme. Scattered engagements mean scattered paperwork, and pension gaps discovered years later are painful to evidence. The same discipline applies to colleagues in fixed practices, whose parallel checklist we cover in medical practice bookkeeping.
A workable monthly routine for a busy locum
- Update the session log as bookings happen, not retrospectively
- Invoice self-employed sessions at month end from the log
- Reconcile payments received against invoices and payslips
- Photograph and file receipts with a one-line context note
- File any pension or engagement paperwork received
When locum affairs justify an accountant
A first year of locuming, a mix of payroll and gross-paid engagements, questions about working through a company, or simple volume are all points where professional help earns its fee, because the classification questions are consequential and easy to get wrong alone. Associate dentists face a close cousin of this situation, covered in records for associate dentists. Our Self Assessment service builds locum returns from exactly the routine above.
Frequently asked questions
How do I know if a locum engagement is self-employed or employed?
You often cannot decide it unilaterally: it depends on the terms and reality of each engagement, and in some settings the engager applies rules that determine it. What you can always do is keep the booking terms and payment evidence so the position for each engagement is documentable.
Do payslips from locum agencies go in my business records?
Keep them, absolutely, but keep them distinct from your gross invoice file. Payslipped income has already had deductions applied and is reported differently from your self-employed income; blending the two causes double counting or omissions.
What is the biggest record-keeping mistake locum doctors make?
Relying on bank statements as the primary record. Bank credits show net amounts with cryptic references, weeks after the work. The session log, kept in real time, is what makes every other record reconcilable.
Should I keep records differently if I work through my own company?
Yes, a company brings its own accounting, filing and payroll obligations well beyond a personal session log, and money moving between you and the company needs careful documentation. Take advice before choosing the structure, not after.
How we can help
Our support for doctors covers locum record set-up, engagement classification questions and year-end returns. Request a quote and we will get the monthly routine working around your rota.