Can I Work as a Locum Through a Limited Company in the UK?
If you are working as a locum pharmacist or technician, you may be wondering:
Can I operate through a limited company instead of being self employed?
The short answer is yes, but the practical and tax implications require careful consideration. The structure you choose can affect how you are taxed, how you are paid and how pharmacies engage you.
This article explains how working through a limited company works in UK pharmacy and what you should consider before choosing this model.
What Does Working Through a Limited Company Mean?
Operating through a limited company means you set up a registered company with Companies House and provide your services through that company.
Instead of invoicing as a sole trader, the pharmacy contracts with your limited company. The company receives payment and you then pay yourself through salary or dividends.
You become both:
• A director of the company
• An employee of your own company
This structure is different from standard self employment.
Is It Legal for Locums to Work Through a Limited Company?
Yes, it is lawful to operate through a limited company in the UK.
However, the arrangement must comply with:
• HM Revenue and Customs tax regulations
• IR35 rules
• NHS contractual requirements
• GPhC professional standards
The key issue is how HMRC assesses your working relationship.
Understanding IR35 and Off Payroll Rules
IR35 legislation is designed to prevent individuals from avoiding employment taxes by operating through a company while working in a way that resembles employment.
In simple terms, HMRC will consider whether your working arrangement is:
• Genuine business to business contracting
or
• Disguised employment
Factors that may be considered include:
• Level of control over your work
• Ability to provide a substitute
• Financial risk
• Mutuality of obligation
Many community pharmacy locum arrangements may fall outside IR35 if structured properly, but each situation depends on the specific contractual terms.
It is strongly recommended that you seek professional tax advice before operating through a limited company.
Why Some Locums Choose a Limited Company
Locums may consider this structure for:
• Tax planning flexibility
• Potential dividend income
• Greater financial control
• Separation of personal and business finances
However, potential tax advantages have reduced in recent years due to changes in dividend taxation and IR35 enforcement.
The decision should be based on professional advice, not assumptions.
Administrative Responsibilities
Running a limited company involves additional administrative duties.
You will need to:
• Register the company with Companies House
• Submit annual accounts
• File corporation tax returns
• Operate payroll if paying yourself a salary
• Maintain business records
There are accountancy costs involved, and compliance failures can result in penalties.
How Do Pharmacies View Limited Company Locums?
Some pharmacies are comfortable engaging limited companies. Others may prefer sole trader arrangements due to administrative simplicity.
Pharmacies must also consider:
• IR35 compliance
• Payment processes
• Internal procurement policies
Larger chains may have stricter engagement policies than independent pharmacies.
Clarity around invoicing, payment terms and contractual structure is essential.
Professional and Regulatory Considerations
Regardless of your payment structure, you remain personally accountable to the General Pharmaceutical Council.
You must still ensure:
• Active registration
• Appropriate indemnity arrangements
• Compliance with professional standards
• Clear documentation
Operating through a company does not remove personal professional responsibility.
Is It Worth It?
Whether working through a limited company is worthwhile depends on:
• Your income level
• The volume of locum work you undertake
• Your tax position
• Administrative tolerance
• Professional advice received
For some locums, sole trader self employment remains simpler and cost effective. For others working at higher volumes, a limited company may offer structure.
There is no universal answer.
Practical Guidance for Locums
Before deciding, you should:
• Speak to a qualified accountant
• Understand IR35 implications
• Calculate total tax impact
• Consider administrative responsibilities
• Confirm that pharmacies are willing to engage your company
Structured agencies such as Pharm-Assist can clarify payment terms and engagement expectations before shifts are confirmed, helping reduce uncertainty.
Final Thoughts
Yes, you can work as a locum through a limited company in the UK. However, the decision should be based on professional tax advice and a clear understanding of IR35 rules and administrative responsibilities.
For many community locums, simplicity and compliance are often more important than perceived tax advantages.
If you are exploring your options as a locum pharmacist or technician, Pharm-Assist supports professionals across the UK with structured bookings and transparent communication.