The Chancellor delivered the Budget on Wednesday 28 October. The headline rates of Income Tax, National Insurance and VAT are unchanged, which is what most of the coverage led with. But for a self-employed locum, the detail matters more than the headlines, and most of it lands in April 2027.
Here's what changes, what doesn't, and what's worth doing about it now.
At a glance
- Mileage: the 55p rate for your first 10,000 business miles is now permanent, and the rate above 10,000 miles rises from 25p to 35p from 6 April 2027.
- Making Tax Digital: quarterly updates still start in April 2027 for locums with qualifying income over £30,000, and late quarterly updates won't be penalised in the first year. If yours was over £50,000, you've been in since April 2026.
- Trading allowance: triples from £1,000 to £3,000 from 6 April 2027, which mostly helps occasional locums.
- Savings: tax on savings interest rises by another two percentage points from 6 April 2027.
- Payments on account: confirmed to move to automated, more regular payments from the 2029/30 tax year.
- Unchanged: Income Tax and National Insurance rates, and the Personal Allowance and higher rate threshold stay frozen at £12,570 and £50,270 until April 2031.
Mileage: 55p is here to stay
In May, the government raised the tax-free mileage rate for cars and vans from 45p to 55p a mile for the first 10,000 business miles, backdated to 6 April 2026. It was announced as temporary. The Budget makes it permanent, and goes further: from 6 April 2027, the rate for business miles beyond 10,000 in a tax year rises from 25p to 35p.
The rates apply to sole traders using HMRC's simplified mileage rates, not just to employees. So for a locum who drives 12,000 business miles a year:
- 2026/27: 10,000 miles at 55p plus 2,000 at 25p is £6,000, up from £5,000 at last year's rates.
- 2027/28: 10,000 miles at 55p plus 2,000 at 35p is £6,200.
If you've been working out this year's claim at 45p, it's worth updating your figures now rather than in January: the mileage calculator uses the new rates. And if a pharmacy pays you mileage, it's a good moment to check what rate you've agreed with them.
The temporary 5p a litre cut in fuel duty has also been extended again, to 1 July 2027.
Making Tax Digital: no change to the date, some breathing room
Making Tax Digital for Income Tax still starts on 6 April 2027 for sole traders whose qualifying income was over £30,000 in the 2025/26 tax year. Qualifying income means your gross takings before expenses, so most locums working more than a couple of days a week will be in. The threshold falls to £20,000 from April 2028.
If your qualifying income was over £50,000 in the 2024/25 tax year, you're already in: Making Tax Digital started for you on 6 April 2026, and your second quarterly update for this year is due by 7 November. That's many full-time locums.
If you're in, you'll need to keep digital records and send HMRC a summary of your income and expenses every quarter, using compatible software, as well as a final return after the end of the year.
The Budget's change is a 12-month penalty easement. For the 2027/28 tax year, HMRC won't apply late submission penalty points to quarterly updates for people joining in April 2027. If you joined in April 2026, the easement doesn't extend your first year: from 6 April 2027, late quarterly updates count towards penalties as normal. It's not a pass, though: you still need to submit every quarterly update before you can file your final return, and the usual penalties for missing the annual deadline still apply.
Trading allowance: £3,000, mostly for occasional locums
From 6 April 2027, the trading allowance rises from £1,000 to £3,000. If your self-employed income in a year is £3,000 or less, you won't need to report it through Self Assessment at all. If it's more, you can deduct a flat £3,000 instead of your actual expenses.
That's useful if you're employed and do the odd locum shift on the side. For a full-time locum, actual expenses usually win: your GPhC fee, indemnity and a year's mileage at 55p will normally come to well over £3,000. You can't claim both, so it's worth comparing the two each year.
Savings: your tax pot is taxed more
Many locums keep the money for their tax bill in a savings account until January. From 6 April 2027, interest above your Personal Savings Allowance (£1,000 a year for basic rate taxpayers, £500 for higher rate) is taxed at 24%, 44% or 49%, two percentage points more than the rates already set for that year. Over a year of steady saving for tax, the interest can add up, so it's worth knowing how much of it is above your allowance.
Payments on account: changes from 2029
The Budget confirms that from the 2029/30 tax year, Self Assessment taxpayers who make payments on account will instead make automated, more regular payments during the year, based on a forecast of what they owe. The existing rules still decide who's in: a bill of more than £1,000, with less than 80% of it taken at source.
Until then, nothing changes: payments on account are still due on 31 January and 31 July. We've covered how payments on account work in its own article.
What else
- Parental pay will be available to eligible self-employed fathers, partners and adopters in Great Britain from April 2029.
- Late payment: the government says it's committed to tackling late payments to small businesses, though there's nothing specific yet. Your existing rights already go further than many locums realise; see what you can charge when a pharmacy pays late.
The pattern: report more often, pay more often
Put the changes together and the direction is clear. HMRC wants to hear from you every quarter from 2027, and to collect tax through the year from 2029. Rates can change part-way through a tax year, as mileage did in May. A pile of receipts and a spreadsheet you update in January worked when the only deadline was 31 January. It won't once there are four or five deadlines a year.
What makes the new rules painless is records that are already complete when you need them, because they were kept as you worked rather than reconstructed afterwards.
If you're joining in 2027, April is closer than it sounds: the first quarterly update covers the three months from 6 April. The easiest time to start keeping records the new way is before you have to.
This article is general information based on the Budget documents published on 28 October 2026, not tax advice. Some measures still need legislation and may change before they take effect, and your own position depends on your circumstances, so check with HMRC or a qualified accountant.