Making Tax Digital for Veterinary Locums —
Agency, Practice-Direct & IR35 Explained
Agency-Booked and Practice-Direct Work Are Taxed the Same Way
Locum vets and veterinary nurses typically work through a mix of specialist locum agencies (who take a margin before paying you a day rate) and direct arrangements with individual practices. Agencies usually pay you the net rate after their margin, so what actually lands in your account from an agency booking is your income from that job — there's no gross-up needed. Every practice and agency payment, however sourced, combines into a single qualifying income figure.
IR35 Is a Separate Question From Your MTD Position
Locum vets working through their own limited company need to consider IR35 status separately from MTD — these are two distinct sets of rules. If you're genuinely self-employed (not operating through a limited company), IR35 doesn't apply to you at all, and your MTD position is assessed the same way as any sole trader: total qualifying income from your most recently filed Self Assessment return.
Records for Locum Shifts and Registration Costs
A locum vet may work for several practices through agencies and direct bookings, with on-call fees on top. A per-shift log keeps the self-employed income clear and separates anything paid through a payslip.
- Log each shift: practice, date, hours or sessions, rate, invoice number and date paid.
- Record on-call and out-of-hours fees as their own line, so they are not lost in the day rate.
- Tag each shift invoiced or payslip, so PAYE shifts never reach the self-employed record.
- Keep RCVS registration, professional indemnity and CPD costs with the receipt.
- Log mileage between practices, using one record per trip.
Where Veterinary Locums Go Wrong With MTD
- Counting payslip shifts. Work paid through an agency payslip is employment income, so it stays out of the figure.
- Forgetting on-call payments. They are self-employed income if paid gross, and they count towards the threshold.
- Assuming a limited company changes everything. The company is outside MTD for Income Tax, but any separate self-employed income in your own name still counts.
- Not recording late agency payments. Record them when received and keep the agency invoice.
- Skipping equipment records. Instruments and scrubs related to your work can be allowable, but only with a receipt.
A Sample Quarter: What the Update Looks Like
A sample quarter for a locum covering several practices and doing some on-call work.
| Q2: 6 July to 5 October 2026 | Amount |
|---|---|
| Locum shifts invoiced to practices | £21,300 |
| Out-of-hours and on-call fees | £2,900 |
| Total income | £24,200 |
| Indemnity and RCVS costs | £1,150 |
| Mileage between practices | £1,420 |
| CPD and equipment | £680 |
| Accountancy and software | £420 |
| Total expenses | £3,670 |
| Profit for the quarter | £20,530 |
Shifts paid through an agency payslip would be left out of this table. Only invoiced, gross shifts belong in the self-employed record.
Worked Example
Agency-booked locum shifts (as paid to her, net of agency margin): £31,600
Direct practice arrangement income: £9,800
Total qualifying income: £41,400 — above the £30,000 Phase 2 threshold, below £50,000. Iris joins MTD from April 2027. Because she's genuinely self-employed rather than working through a limited company, IR35 doesn't apply to her arrangements, and her MTD position is assessed as straightforward sole trader income.
What You Can Claim
- RCVS registration and retention fees
- Professional indemnity insurance
- Travel costs between practices at 55p/mile if not reimbursed
- CPD courses and required ongoing training
- Professional body membership — BVA and specialist college fees
- Equipment you provide yourself rather than what's supplied by the practice
Best MTD Software for Veterinary Locums
Software links are affiliate, help fund CheckMyMTD. Recommendations based on ease of use for self-employed income tracking.
Frequently Asked Questions
Do I need to gross up what locum agencies pay me?
No, agencies pay you the actual amount after their margin, and that's your income from that booking. There's no gross-up adjustment needed for MTD purposes.
Does IR35 affect my MTD position?
IR35 and MTD are separate sets of rules. If you're genuinely self-employed rather than working through your own limited company, IR35 doesn't apply to you, and your MTD position is assessed as standard sole trader income.
I work through several locum agencies. Do I add all their payments together?
Yes, all self-employment income combines into a single qualifying income figure, regardless of how many agencies or practices you work with.
Can I claim my RCVS registration fees?
Yes, professional registration required for your work is a normal allowable business expense.
Does travel between practices count as a business expense?
Yes, if you're not reimbursed by the agency or practice, travel between assignments can be claimed at 55p/mile for the first 10,000 business miles.