Employment Types for Locums
Making the right decision concerning your financial arrangements is a crucial part of undertaking veterinary locum work. It affects your earnings and, in some cases, can affect your suitability for specific vacancies.
We have seen a change in the way locum’s work, and in the preferences of client practices and how their practice policies can affect your search for work.
An Introduction to Contractor Types
Ltd CompanyLimited Companies are perceived by many clinics as the ‘preferred’ way to engage a locum vets and can offer improved tax efficiency if you intend to work as a locum on a long term basis. There are set-up and year end costs involved, however if you have a friendly accountant and are happy to get involved with some of the administration of your own business, the rewards can be worthwhile.
Umbrella ServiceAn Umbrella service, in layman’s terms, is essentially a financial service that you engage to invoice and deduct Income Tax and National Insurance at source. They effectively become your payroll department. They will invoice your practices for you, help you to maximise your earnings through compliant expense allowances, and can be engaged on a pay as you go basis. By taking care of your tax at source, you can avoid any complicated tax returns and eliminate the risk of an IR35 to the end client practice. They are convenient and flexible, however over time their fees may total more than running your own company. There are additional National Insurance costs involved, and realistically you must be able to legitimately offset expenses to make the sums work in your favour, but as a shorter term solution it can be a good option if you prefer not to have to run the finances yourself.
Self-EmployedThe most common issue with working as a self-employed contractor is that many contractors are unaware that a worker’s employment status, that is whether you are employed or self-employed, is not a matter of choice. Whether someone is employed or self-employed depends upon the terms and conditions of the relevant engagement and as such, you have to be aware of; and working with active compliance within the framework of the IR35 legislation. Information gathered from the Inland Revenue suggests that as a general guide as to whether a worker is an employee or self-employed; if the answer is ‘Yes’ to the following questions, it will ‘usually’ mean that the worker is self-employed, however, the responsibility lies with the locum to establish their status for each and every assignment:
- Can they hire someone to do the work or engage helpers at their own expense?
- Do they risk their own money?
- Do they provide the main items of equipment they need to do their job, not just the small tools that many employees provide for themselves?
- Do they agree to do a job for a fixed price regardless of how long the job may take?
- Can they decide what work to do, how and when to do the work and where to provide the services?
- Do they regularly work for a number of different people?
- Do they have to correct unsatisfactory work in their own time and at their own expense?
- Inland Revenue Self-Assessment Order Line – 0300 200 3310
- Newly Self-Employed Help Line – 0300 200 3504