Veterinary Recruitment Agency
Saturday, 3 December 2022 08:04 GMT
Veterinary Employment: Consider your Employment Options
Coming to the UK to seek work as a veterinary locum is not simply a matter of turning up, starting to work and waiting to be paid. There is a simple matter of income tax, a matter on which the UK tax authorities are exceptionally strict. That means that you must make the correct provisions for your taxes to be paid - both Income Tax and National Insurance (NI), originally intended as a means of working people to pay for their future retirement pension and for their health services.
However NI is now regarded as just an extension of income tax, and those that work here and are paid here are subject to the same taxes as any other resident in the UK that is working for a UK business. So you must examine all the possibilities available to overseas workers, such as veterinary locums, that are working on short-term contracts or on a temporary basis for any veterinary practice.
So what employment options do you have as a veterinary locum?
Sole Traders and Self-Employment:
It is not sufficient to simply claim yourself to be self-employed, because the strict attitude of the Inland Revenue Department (IRD) as to what constitutes 'self-employed' has prompted most veterinary practices to insist that applicants be at least a Limited Company. Operating as a Limited Company is currently the most tax effective way for long term locums.
Veterinary Employment Agencies:
You could join an employment agency and have them pay you on a PAYE tax basis (Pay As You Earn), but they will not pay your expenses. You have to be a member of a company to get paid for your expenses, and what veterinary locum doesn't have claimable expenses?
Veterinary Locums operating through an Employment agency are earning a significant lower income that locums operation as a Limited Company. This is partially due to the fact that the Employment Agency (Your Employer) will take a cut of your daily wages you earn (through your work in a veterinary clinic) to cover their expenses and that you are unable to claim back your operating expenses (such as CPD, car, cell phone, computer and travel)
Limited Company:
You can start your own Limited Company through Company House (UK) or through a tax accountant. Having your own limited company is the most tax effective way for long term locums.
Umbrella Companies and Managed Service Companies (MSC)
An umbrella company will invoice the veterinary business in which you work and receive payment from them. They will then pay you the correct rate for your work (the invoiced amount), and will deduct from that PAYE tax and their fee and then add any expenses you requested.
An MSC will also invoice the practice in the same way, but will pay you the rate agreed with them plus expenses with the PAYE tax deducted, which will be less than the rate actually paid by the veterinary practice. However, when you join the MSC, you will do so as a shareholder, and you will also be paid dividends that will often take your income above that expected with an umbrella company.
In summary here are your options for short and long term locum positions:
© ALPHA IMPACT™
Coming to the UK to seek work as a veterinary locum is not simply a matter of turning up, starting to work and waiting to be paid. There is a simple matter of income tax, a matter on which the UK tax authorities are exceptionally strict. That means that you must make the correct provisions for your taxes to be paid - both Income Tax and National Insurance (NI), originally intended as a means of working people to pay for their future retirement pension and for their health services.
However NI is now regarded as just an extension of income tax, and those that work here and are paid here are subject to the same taxes as any other resident in the UK that is working for a UK business. So you must examine all the possibilities available to overseas workers, such as veterinary locums, that are working on short-term contracts or on a temporary basis for any veterinary practice.
So what employment options do you have as a veterinary locum?
Sole Traders and Self-Employment:
It is not sufficient to simply claim yourself to be self-employed, because the strict attitude of the Inland Revenue Department (IRD) as to what constitutes 'self-employed' has prompted most veterinary practices to insist that applicants be at least a Limited Company. Operating as a Limited Company is currently the most tax effective way for long term locums.
Veterinary Employment Agencies:
You could join an employment agency and have them pay you on a PAYE tax basis (Pay As You Earn), but they will not pay your expenses. You have to be a member of a company to get paid for your expenses, and what veterinary locum doesn't have claimable expenses?
Veterinary Locums operating through an Employment agency are earning a significant lower income that locums operation as a Limited Company. This is partially due to the fact that the Employment Agency (Your Employer) will take a cut of your daily wages you earn (through your work in a veterinary clinic) to cover their expenses and that you are unable to claim back your operating expenses (such as CPD, car, cell phone, computer and travel)
Limited Company:
You can start your own Limited Company through Company House (UK) or through a tax accountant. Having your own limited company is the most tax effective way for long term locums.
Umbrella Companies and Managed Service Companies (MSC)
An umbrella company will invoice the veterinary business in which you work and receive payment from them. They will then pay you the correct rate for your work (the invoiced amount), and will deduct from that PAYE tax and their fee and then add any expenses you requested.
An MSC will also invoice the practice in the same way, but will pay you the rate agreed with them plus expenses with the PAYE tax deducted, which will be less than the rate actually paid by the veterinary practice. However, when you join the MSC, you will do so as a shareholder, and you will also be paid dividends that will often take your income above that expected with an umbrella company.
In summary here are your options for short and long term locum positions:
- Sole traders are no longer readily accepted by veterinary clinics
- Short term locums should become short term (contract) employees of the veterinary clinic seek remuneration through their PAYE roll
- Veterinary Employment and Umbrella Agencies are the least profitable way for a locum vet to conduct their services
- Limited Companies are the most tax effective way to operate as a long term locum
© ALPHA IMPACT™