It is standard practice for veterinary practices and businesses to engage the services of locum vets. Ensuring you engage with locums in the most appropriate way for your practice (i.e. as an employee, a self-employed individual, or through a personal service company) is key to your practice’s success, but there are compliance considerations of the different types of engagement and getting it wrong can be costly. HMRC are launching a campaign to educate businesses on this complex area of tax, so do not be unnerved if you receive some correspondence on this from HMRC – it is designed to support not challenge.
In 2021, the responsibility for assessment of employment status for locum workers engaged through intermediaries (such as an agency, umbrella company or the locum’s personal service company) changed for medium and large sized businesses, with the onus shifting from the intermediary to the end user client (the practice). For small practices the onus remains on the intermediary.
You are defined as a small business if you meet two of the following criteria for accounting periods starting on or after 1 April 2025:
- Turnover no more than £15m per annum (Exc. VAT)
- Balance sheet total not more than £7.5m
- No more than 50 employees
The previous thresholds will apply for accounting periods prior to 1 April 2025:
- Turnover no more than £10.2m per annum (exc. VAT)
- Gross assets (i.e. ignoring liabilities) on the balance sheet of no more than £5.1m
- No more than 50 employees
For businesses engaging with self-employed locums, there has been no change to those rules, and the responsibility for them still sits with the end user client (practice) irrespective of their size. For both of the above situations we would strongly recommend the following is in place in respect of each engagement:
- An assessment of the ‘employment status’ using HMRC’s CEST toolkit – Check employment status for tax – GOV.UK
- A status determination statement, where appropriate, is issued to the locum and the intermediary contracting with the end user detailing:
- Date of contract
- Status Determination
- Supporting facts for determination (this can include the CEST determination from HMRC’s toolkit)
- Details for appealing the determination
- Maintain records of all determinations and communications.
There are a number of factors which determine the status of the engagement, and if you need support with ensuring you are compliant in the way you are dealing with your locums, please get in touch for our free factsheet with further details. Our Veterinary team specialists are also happy to have a chat with you to see if there is anything you need to be doing to protect your practice and your locums should HMRC challenge your arrangements.
