What locum GPs need to know about the NHS Pension Scheme

Specialist GP accountant Vicky Earnshaw explains how the NHS Pension Scheme works for locum GPs, including how to complete the relevant forms, advice on record keeping and what annualisation means.

(Photo: stocknshares/Getty Images)

When you start as a locum GP, not only are you suddenly in charge of your own business, you also become responsible for your own pension compliance.

As with everything you do, being well organised and understanding your obligations from the outset will make pensioning your locum work less daunting. The following is only the tip of the iceberg on what is a significant and, at times, complex subject matter but it will get you started along the right path.

Do I have to pension my locum work?

Ordinarily if a practitioner has opted into the NHS pension in one role, they must pension all their practitioner income across all their roles. There is an exception to this, however, for locum GPs whereby you can choose whether or not to pension locum work on an engagement-by-engagement basis.

It is important to note that you cannot pension your locum work if you are operating as a limited company or if you obtain work via an agency that is not recognised as an NHS employing authority.

Should I pension my locum work?

Public sector pensions are considered among the best around. This does come at a cost though and one that is variable owing to the tier rate system behind employee contributions (see below). 

Employer and employee contributions are tax deductible so the net impact on your pocket can be vastly reduced by the tax relief obtained.

The decision over whether or not to pension your work may influence your fee negotiation with the GP practice, i.e. if you are not pensioning your work you may be able to negotiate a higher fee.  This is because employer contributions are a cost borne by the practice on top of your fee. 

This choice is a personal decision and one that will directly impact the value of your pension on retirement and so should not be taken lightly.  You may wish to consult with an Independent Financial Advisor who is familiar with the NHS pension scheme if you are unsure.

Pension contributions for ‘pure’ locum GPs

If you are a locum GP with no other NHS pensioned roles you are considered only to be a member of the NHS pension scheme on the days you are carrying out pensioned locum work.  The implications here are two-fold:

  • Firstly, your tier rate is subject to annualisation (see below) meaning that your employee pension contributions will likely fall into the 14.5% tier rate.
  • Secondly, your beneficiaries will not be entitled to the death in service benefit if you were to die on a day that you were not undertaking pensioned work.

There are a few solutions to the above which a suitably experienced locum GP specialist accountant should be able to assist with.


Your pensionable income is always 90% of your session fee, on which the GP practice has to pay employer contributions at 14.38%. This amount is then added to your session fees to calculate the total invoice value. 

Your invoice should show a breakdown of session fees, pensionable value, employer contributions and the total amount invoiced, as shown in the example below.

Monday 11 October 2021
£340 per session x 2 plus home visit £20
XYZ Medical Centre09:00-17:00£700
Tuesday 12 October 2021
£340 per session x 2 plus home visit £20
XYZ Medical Centre09:00-17:00£700
Wednesday 13 October 2021
£340 per session x 2
XYZ Medical Centre09:00-17:00£680
Pensionable pay£1,872
Employer's superannuation at 14/3%£269.19

There are various locum software packages available for a minimal cost which can generate appropriate invoices and auto-populate the pension forms, discussed further below.

What are the locum forms?

When pensioning work at a GP practice, there is one form (Locum A) each time you raise an invoice, and a second form (Locum B) when you receive payment.  The Locum B form is completed once per month for all payments received in that month, collating the employer contributions and calculating the total employee contributions due. 

When pensioning out-of-hours or CCG work, there is only one form, called a SOLO form. This is completed on your behalf by the ‘employer’, who also pays over all contributions on your behalf too.

How to complete locum A and B forms

Whether you complete the forms manually or via locum software, the process is summarised as follows:

Step 1: Raise your invoice and send this to the practice manager alongside your completed Locum A form. The practice manager signs and returns this form to you.  

Step 2:  At the end of each month complete a Locum B form with reference to all invoices PAID in that month. This form collates the total monthly contributions you need to pay over to NHS England or your Local Health Board (LHB) if in Wales, comprising both your employer and employee contributions at the applicable tier rate (see below).

Step 3: Upload and send the Locum B form, together with the corresponding Locum A forms to NHS England via either PCSE Online here, or using the PCSE enquiry/form upload here. If using the latter option, select “GP Pensions” in the first two drop down boxes.  If in Wales, send directly to your LHB.

Step 4: Transfer the pension contribution by BACS to the NHS England account (or your LHB if in Wales) being mindful of the fact that you need to change the unique payment reference to match your Form B for that month. The deadline for payment is the seventh day of the month following that to which the Locum B form relates, i.e. for all invoices paid in November, you must submit your November Locum B form and pay over your contributions by 7th December.

What tier rate to apply

You’ll need to predict how much your pensionable income will be in the pension year (to 31st March) to check which tier rate you need to apply in respect of your employee contributions. This is not always as simple as adding up the pay across your posts, especially for locums. 

A locum GP specialist accountant will be able to assist in calculating your tier rate.

If you are purely a locum you are likely subject to what is known as ‘annualisation’. This serves to consider the rate of pay, rather than total pay. The implications of this can be drastic, usually resulting in a tier rate of 14.5% regardless of the total level of income. That said, there are acceptable workarounds to this and a locum GP specialist accountant should be able to offer further guidance.

The resulting tier rate is applied across all your actual practitioner pensionable pay received. 

After the end of the pension year you should check if you had applied the correct rate.  Rectification can be done by way of the type 2 self-assessment form, if applicable, or by contacting PCSE or your LHB directly.

Record keeping

You should always keep records of your Locum A, B and SOLO forms in case PCSE/your LHB request copies or to evidence your pensionable pay should there be any discrepancies in your NHS Pension records. It is also advisable to keep a note of the date and method of payments made to NHS England/your LHB in respect of each Locum B form submitted.

The six-month rule

If you work more than six months at a single practice you can choose to be regarded as a type 2 medical practitioner prospectively. The impact of this is that the practice must then pay both the employer and employee contributions directly to NHSE/PCSE or the LHB as though you were a salaried GP.

This is solely from a pension perspective; it is possible to remain self-employed from a tax perspective. This avoids the need to continue with the Locum A and B forms in respect of that work, however you would need to complete a type 2 self-assessment form after the year end.

Choosing an accountant

There are many niche aspects to accounting, tax and pensions for locum GPs, largely owing to the complexities and administration of the NHS pension scheme which is so unique to locums. An experienced locum GP specialist accountant will be able to guide you through this.

Owing to the complexity and cost of your pension contributions, the benefit of having a specialist accountant to both advise and obtain the correct tax relief for you should prove invaluable. This is an area that non-medical specialist accountants commonly get wrong, inadvertently costing you in lost tax relief.

  • Vicky Earnshaw, founder of VE Medical, specialises in locum GPs, salaried GPs and portfolio GPs and has a wealth of knowledge and experience in respect of accounts, tax and NHS pension compliance.  If you would like her assistance, call or WhatsApp 07436 899 890 or email vicky@ve-medical.com

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