Locum doctors could suffer income tax at 40%, superannuation contributions at 7.5% and national insurance at 8% (total 55.5%).
No-one expects tax bills to fall for several years so any opportunity to reduce tax rates or utilise additional tax allowances and reliefs must be explored.
One way of doing this is to consider which legal structure is the most 'tax' appropriate for your trade. You could choose from four main legal structures:
Choosing the most appropriate legal structure could allow a locum doctor to achieve the following:
- Split some of their income with a spouse or civil partner
- Cause income to be taxed at 20% rather than 40%
- Reduce national insurance contributions
- Shelter income in a corporate structure where it will suffer tax at 20% rather than 40% or 50%
However, tax is not the only consideration and, not all situations give you the freedom to choose your legal structure. Each locums circumstances are different and this type of tax planning is not appropriate for everyone.
We are experienced in considering all these relevant issues. Please call us if you would like to discuss all your individual circumstances.
Contact us today for free consultation
Telephone 0207 183 0034