Where that happens, the risk of getting it wrong sits largely with the practice, not the locum.
Two Different Sets of Rules
Where a locum invoices you personally as a sole trader, ordinary employment status rules apply. If HMRC concludes the relationship was really employment, the practice is generally liable for the PAYE and National Insurance that should have been operated, with interest and potentially penalties.
Where a locum works through their own limited company, the off-payroll working rules may apply instead. For medium and large clients the practice must determine status and issue a status determination statement. For small clients the responsibility stays with the locum company.
What Makes an Arrangement Look Like Employment
- Regularity and duration
- The same person, on the same days, for a long unbroken period, with an expectation of continuing.
- Control
- Fixed hours set by the practice, allocation to the practice rota, and direction on how work is done beyond clinical protocols everyone follows.
- Integration
- Appearing on the practice website as a team member, managing employed staff, holding practice responsibilities, attending as part of the management structure.
- No financial risk
- Paid for time regardless of outcome, with equipment, indemnity and materials all provided by the practice.
- No substitution in reality
- A right to send a substitute that both sides know would never be accepted.
Reducing the Exposure
Review long-standing arrangements honestly rather than relying on a contract template. Keep the paperwork consistent with what actually happens, because working practices carry more weight than wording.
Where an arrangement really is employment in substance, the cheapest route is almost always to regularise it going forward rather than to leave it and hope. Where it is genuinely self-employed, document why, keep the evidence, and revisit it if the pattern changes.
Why It Matters at Sale
On a share purchase, historic PAYE exposures transfer with the company. A buyer due diligence process will look at long-term locum arrangements specifically, and finding one is a price reduction or an indemnity. Cleaning this up before a sale is considerably cheaper than negotiating about it during one.
Written by Veterinary Accountants UK editorial team. Published 3 August 2026.
Last reviewed 3 August 2026. [REVIEWER DETAILS REQUIRED BEFORE PUBLICATION]