Self-employed or agency PAYE? How locum and agency healthcare work actually gets taxed

This is probably the single most misunderstood thing across locum and agency healthcare work — and it’s worth getting sorted before worrying about mileage logs or expense categories, because it changes what admin actually applies to you at all.

Two very different situations that both get called “locum work”

Genuinely self-employed — you invoice directly (or your limited company does), you’re registered for Self Assessment, and you’re responsible for your own tax and National Insurance.

Agency PAYE — you’re booked through an agency, but tax and National Insurance are deducted at source, the same as a normal employee, even though the work itself is flexible and shift-based. This is very common in hospital locum work and agency nursing especially, and it surprises people who assumed flexible, shift-based work automatically meant self-employed.

Why this isn’t just a technicality

If you’re taxed PAYE through an agency, you generally don’t need to register for Self Assessment for that income, you’re not claiming mileage or expenses against it the way a self-employed person would, and a lot of general “getting organised for tax” advice simply doesn’t apply to that income. Assuming you’re self-employed when you’re actually PAYE — or the reverse — can lead to avoidable confusion, missed registration deadlines, or claiming things you’re not entitled to.

Why it’s not always obvious

Whether a particular engagement counts as self-employed or PAYE isn’t just about what you call yourself — it depends on factors like who controls how, when, and where the work is done, and specific tax rules around agency workers. This varies by agency, by how you’re engaged, and sometimes even booking to booking, which is why there’s no single blanket answer.

How to actually check

• Look at your payslip or remittance. If tax and National Insurance are already deducted before the money reaches you, that’s PAYE. If you receive the full agreed amount and have to sort tax yourself, that points toward self-employed.
• Ask your agency directly how they engage you for tax purposes — this is a completely normal question, and any reputable agency should be able to answer it clearly.
• If you’re mixing income types across different bookings or agencies, it’s worth a proper conversation with an accountant rather than guessing how they interact.

How LocumBook helps with this specifically

Whichever situation applies to you, logging your shifts, sites, and hours as you go is worth doing regardless — it’s your own record to check against payslips, spot errors, and keep a clear year-to-date picture. LocumBook tracks sessions the same way no matter your tax status. If part or all of your income turns out to be self-employed, the app’s mileage tracking and self-assessment export tools are ready to use for that income specifically — you’re not locked into assuming one tax situation from day one, and nothing about logging a shift commits you to a particular answer before you’ve actually confirmed it.

This is a general overview, not personal tax advice — engagement type and tax rules depend on your situation. When in doubt, check with your agency and an accountant. For self-employed basics, see Locum tax basics for UK doctors.