Working as a bank nurse can give you the flexibility to work when and where you want, whether that’s around your family, further education, or even another job. But did you know there are different ways you can do it?

You can work through an umbrella company, be employed by the NHS Trust, or become self-employed. While being your own boss can offer you lots of freedom (and feels good to say out loud), you need to ensure you know the rules regarding tax.

We’re here to help answer your questions, so you can pick the best option for you if you want to become a bank nurse.

What are bank nurses?

Bank nurses, often referred to as agency nurses, are registered nurses who offer temporary or ad-hoc staffing to healthcare facilities – such as hospitals, clinics, and care homes. In many cases, bank nurses cover shifts to help with staff shortages due to illness and holidays, as well as during in-demand periods (flu season, for example) where staff require extra support.

How are bank nurses paid?

The answer to this boils down to how you operate as a bank nurse. If you decide to work under an umbrella company, you’ll likely receive monthly payments that are sorted for you through the agency you’re with. Whereas, if you operate through your own limited company, you can pay yourself a salary through the business itself.

Working for yourself means you won’t be entitled to sick pay or annual leave, so it’s best to ensure you put money aside for any holidays, as well as unexpected days off sick – we all have them!

What is the best way to be a bank nurse?

Many bank nurses work via agencies or join a staff bank which the Trust then uses when it needs to. In this instance, you’d be paid on a weekly basis by the Trust, and you can usually pick and choose shifts you’d like to work online, without the worry of filling in any tax returns.

Similar to being in employment, working for an agency also means you don’t have the hassle of sorting your taxes or figuring out how to pay yourself.

While working this way may seem like a no-brainer, some nurses decide to start up their own business. The benefits of this include tax efficiency, the ability to claim tax relief on expenses (think travel expenses and work uniforms), and in many cases, the freedom to be their own boss.

Working as a bank nurse is a little different from someone in full-time employment, in the sense that you’re able to choose your working hours, such as which shifts you can and can’t pick up.

This type of flexibility (and the fact you can move around and travel to different locations for a variety of Trusts) is more like contracting than it is employment – which is why the option to start your own business is there.
 

What business structure can I use to be a bank nurse?

If you decide that registering as a business is right for you, the next step is choosing which business structure you want to operate as. If you’re setting this up alone, you’re likely going to choose between being a sole trader or a limited company. We’ll look at the key differences between the two.

Sole trader

When you’re a sole trader, you are the business, meaning HMRC doesn’t differentiate between the two. So, any business assets and liabilities are yours. This comes with pros and cons – although these do depend on your circumstances!

• There are no start-up fees when you register as a sole trader, and reporting your taxes is fairly simple (especially compared to a limited company). All your profits are yours to keep (once you’ve paid any tax obligations).
• Being a sole trader comes with ‘unlimited liability’, which means any debts your business incurs are your debts. It also may be less tax-efficient depending on how much you’re earning.

Limited company

As a limited company, you and the business are seen as two different entities. You can appoint yourself (or others) as a director, and because you’re separate, you have ‘limited’ liability. This means that if the company ever has trouble paying its debts, your personal assets are still safe. Like a sole trader business, operating a limited company comes with considerations depending on your needs.

• It can sometimes be more tax-efficient. For example, if you appoint yourself as a director you’ll be able to pay yourself a smaller salary and then take the rest of your earnings in dividends.
• You have some protection against business debts with ‘limited’ liability
• You can make pension contributions through your limited company
• Companies House charge a fee to register a new company
• Tax reporting can be more complicated, with Company Tax Returns for the business, as well as your own personal income to report

Am I affected by IR35 as a bank nurse?

Familiarising yourself with IR35 when you start your business might help save you a heap of stress further down the line, as it’s one thing many contractors accidentally fall into. This includes people in the medical industry such as bank nurses and even locum doctors.

What is IR35?

If you’re unaware of what it all means, don’t panic – IR35 is where HMRC sees you as an employee posing as a contractor. i.e., an employee in disguise.

But why would anyone ‘disguise themselves’ as an employee? Well, before IR35 came into play, any employee could do a switcheroo to carry out the exact same role for their employer but through their own limited company. This could allow them to pay less tax, as well as benefiting the employer because they would no longer need to make employer’s National Insurance or pension contributions.

IR35 ensures there are no loopholes from either side, and while it ensures disguised employees are paying the right taxes to HMRC, it also helps to ensure they’re getting employee rights (such as annual leave, pension contributions, etc).

How does IR35 apply to bank nurses?

It’s easier to get caught up in IR35 that you’d think, especially if you begin working with some really great hospitals that always have the type of shifts you want.

If you’re deemed inside IR35 by HMRC, the practice will pay your invoice as normal, but now they’ll make the necessary deductions – similar to PAYE.

It’s worth noting you can be ‘inside’ IR35 for one hospital, and ‘outside’ for another. For example, you do the odd morning or afternoon shift at a different hospital on a very ad-hoc basis. You just need to ensure everything is recorded, so you pay the right amount of tax and avoid doubling your bill by mistake.

Do bank nurses need to complete a tax return?

If you go down the self-employed route, the type of tax return you need to submit depends on your business structure.

If you’re a sole trader, you’ll submit a Self Assessment, paying income tax and National Insurance on the profits you make. The type of National Insurance you pay as a self-employed person is separate to NI deducted by an employer.

If you operate as a limited company, you’ll need to submit a Self Assessment tax return for any personal income you take out the business, as well as submitting a Company Tax Return and annual company accounts for the business.

It can get a bit confusing, so make sure you set reminders to stay on top of those key tax dates for your business! It’s also useful to leep up to date with the UK tax rates which apply to your business, so you know what to expect and pay the right amount of tax.

 
Learn more about how we can help medical professionals like bank nurses and locum doctors. You can talk to one of the team on 020 3355 4047 or get an instant quote online.