🩺 Introduction
If you’re working as a locum doctor, dentist, or healthcare practitioner, chances are you’ve heard of IR35 often followed by confusion, concern, or conflicting advice.
But what does IR35 actually mean for your career, your contracts, and your income?
In this blog, we’ll break down IR35 in plain English, explain how it applies to healthcare professionals, and show you how to stay on the right side of HMRC while keeping more of what you earn.
⚖️ What Is IR35?
IR35 is a tax rule created to prevent “disguised employment.” In short, it stops individuals from working as if they were self-employed (via a limited company) while actually functioning like an employee.
Why does this matter?
If you’re inside IR35, HMRC expects you to pay income tax and National Insurance like an employee potentially reducing your take-home pay and exposing you to backdated tax liabilities.
If you’re outside IR35, you can continue benefiting from tax efficiencies like:
- Taking income as dividends
- Claiming legitimate business expenses
- Retaining control over your finances
🧪 Why IR35 Affects Locum Healthcare Professionals
Whether you’re:
- A locum GP moving between NHS trusts,
- A self-employed dentist providing private or NHS services,
- Or a healthcare contractor (physiotherapist, sonographer, radiographer, etc.)
…you are at risk of being assessed under IR35 especially if you:
- Work regular shifts at a clinic or practice
- Use the client’s systems or tools
- Follow direct supervision or schedules
- Lack a substitution clause in your contract
These all signal employment-like behaviour, which could trigger IR35 scrutiny.
🔍 How HMRC Assesses IR35
When HMRC (or your agency or end client) reviews your contract, they consider:
1. Control
Do you decide how and when you work or are you told what to do, when, and how?
2. Substitution
Can you send a qualified replacement to complete the work if needed?
3. Mutuality of Obligation (MOO)
Is there an expectation that the client will keep offering work, and you must keep accepting it?
If your engagement looks like an employee relationship, you’re likely inside IR35.
❗️What Happens If You’re Inside IR35?
If you’re deemed inside IR35, your income is taxed at source, like a regular employee and you could face:
- ✅ Higher Income Tax and National Insurance
- ✅ Loss of expense claims
- ✅ Penalties and backdated tax if IR35 is applied retrospectively
And yet… you don’t receive employee benefits like sick pay, holiday pay, or job security.
✅ How to Stay IR35-Compliant in 2025
Here’s how to reduce your risk and protect your income:
- Get all contracts reviewed for IR35 risk before signing
- Avoid long-term contracts with a single clinic or client
- Use clear written contracts that confirm your self-employed status
- Ensure substitution clauses are present and valid
- Work with a specialist accountant who understands the healthcare sector
- Document your working practices, showing you operate independently
💼 How ISA Consortium Ltd Helps
At ISA Consortium Ltd, we provide specialist accounting services for locum doctors, dentists, and healthcare practitioners, including:
- ✅ IR35 contract reviews to help you avoid risk and stay compliant
- ✅ Tax planning tailored to the needs of self-employed healthcare professionals
- ✅ Advice on business structure sole trader vs limited company
- ✅ Bookkeeping and cloud accounting support
- ✅ HMRC compliance and correspondence handling
- ✅ Ongoing support and jargon-free advice all year round
We take the time to understand your contracts, working patterns, and long-term goals — so you can focus on patient care while we take care of your finances.
🧠 Final Thoughts
IR35 is complex but with the right knowledge and support, it doesn’t have to be stressful.
As a self-employed healthcare professional, staying compliant with IR35 not only protects you from tax issues, but also helps you keep more of what you earn.
📞 Book a Free IR35 Consultation
Unsure if your contract falls inside IR35?
Worried about a recent agency engagement or upcoming shift?
We’re here to help.
👉 Book your free 20-minute discovery call with one of our healthcare accounting specialists today.
Let’s make IR35 simple, together.
All this and more
We offer all the above as part of our full Tax Services and Accounting and can also help you with Capital Gains Tax, Inheritance Tax, Retirement Planning, even filling out your Self-Assessment Tax Returns for you.
