Locum doctor limited company accounts: what to expect across a full year

Four things come round every year, and they do not share a date.

• Annual accounts to Companies House. Most locum companies qualify as micro-entities, so what goes on the public record is a short balance sheet. Due nine months after your accounting reference date.
• Corporation tax return (CT600) to HMRC. Due twelve months after the year end, but the tax itself is payable at nine months and one day. That gap catches people out every year: the money is due before the return is.
• Confirmation statement. A yearly check that your company details are correct. It takes minutes and it is not optional.
• Your own Self Assessment. Dividends, any NHS or trust employment, property income, pension charges. Due 31 January after the tax year ends.

Payroll sits on top of that as a monthly or annual submission, depending on how your salary is set. Look at any locum company’s filing history on Companies House and you will see the same rhythm repeating: accounts, confirmation statement, accounts, confirmation statement, year after year. Boring is what you want from this part.

The company’s profit is not your money until you take it out, and how you take it out is where the work is. A small salary through payroll plus dividends on the rest is the usual shape for a director, but the right level depends on what else is going on in your life that year.

Things that move the answer: whether you also hold a substantive NHS post, whether you have a partner with unused basic rate band, whether you are near the point where the personal allowance starts to taper, and whether the company is paying into a pension for you.

One specific point worth checking. If you are the only person on your payroll, you cannot claim the employment allowance, currently £10,500. Putting a family member on the payroll where they genuinely do work for the company, paid above the £5,000 a year secondary threshold (about £417 a month), can bring it back into reach. We write about paying a spouse from a limited company separately, because it has rules worth getting right rather than guessing at.

None of this works if the conversation happens after the year end. It has to happen while you can still change what you do.

This one is new enough that plenty of accountants have not caught up.

HMRC’s long-standing position was that supplying temporary medical staff was a standard rated supply of staff, and only narrow deputising arrangements such as GP out of hours cover fell inside the VAT exemption at Item 5, Group 7, Schedule 9 of the VAT Act 1994. In Isle of Wight NHS Trust v HMRC [2025] UKFTT 1114 (TC), the First Tier Tribunal disagreed. It found the exemption applied to supplies of locum doctors more broadly, including through employment businesses, and was not confined to out of hours cover.

HMRC did not appeal and is reviewing its policy, with updated guidance promised. In the meantime it has set out how a supplier who charged output tax that should have been exempt can correct the position, within a four year window, either through a VAT return adjustment or an error correction notification on form VAT652. Input tax already recovered has to be taken into account, and partial exemption comes into play, so claims are for the net amount.

Most individual locums are below the registration threshold and this will not touch them. If you are registered, or you sit between an agency and a trust, it is worth a proper look.

The record keeping for a locum company is light compared with most trading businesses. You are not holding stock, you are not running credit control across fifty customers, and your transaction volume is low. That is exactly why it tends to get neglected until the week before a deadline.

What we ask clients for is simple: a business bank account used only for the company, invoices raised and paid through it, receipts captured as they happen, and a note of mileage where you are travelling between sites rather than to a single regular workplace. Dext or Hubdoc on your phone turns receipt capture into a two second job, and we set those up and show you how to use them rather than leaving you to work it out.

Where locum accounts get expensive is personal spending through the company card. Every one of those transactions has to be identified, classified and, if it is personal, treated as a director’s loan or a dividend. That is somebody’s time, and time is cost. Keeping one clean account does more for your fee than any amount of chasing paperwork in January.

Here is the version we aim for with professional services clients, and it is not complicated.

Bookkeeping stays current, so by month three you already know roughly what the corporation tax bill will be. Somewhere around month eight or nine, before the year closes, we look at profit to date, your other income, pension contributions, and what you want to take out. That conversation changes the number you keep, because there is still time to act on it. After the year end, the accounts and the CT600 are prepared, filed, and explained to you in plain terms, and your Self Assessment follows from the same set of figures rather than being rebuilt from scratch.

Compare that with the common experience: the accounts arrive eight months after the year end, the tax was due two months before you saw them, and nobody asked you a single question along the way. The filings were technically done. Nothing else was.

If you are switching firms, the handover is straightforward and takes two to four weeks without disrupting your filing dates. We cover how to switch accountants without a gap in your filings in detail.