Umbrella vs limited company on £300 a day
| Inside IR35 (umbrella) | Outside IR35 (Ltd company) | |
|---|---|---|
| Gross contract income | £69,000 | £69,000 |
| Employer NI and levy | −£8,610 | −£1,136 |
| Business expenses | — | −£2,000 |
| Corporation tax | — | −£10,179 |
| Income tax | −£11,588 | −£0 |
| Employee NI | −£3,218 | — |
| Dividend tax | — | −£5,935 |
| Take-home per year | £45,583 | £49,751 |
| Per month | £3,799 | £4,146 |
| Per week | £877 | £957 |
| Share of gross kept | 66.1% | 72.1% |
Inside IR35 your salary of £60,390 crosses the £50,270 higher-rate threshold, so everything above it is taxed at 40% plus 2% employee NI.
Outside IR35 your company profit of £53,295 sits in the marginal relief band, so corporation tax works out between 19% and 25% (£10,179 in total).
These figures assume 5 days a week for 46 weeks, no pension contributions, umbrella margin not deducted, and for the Ltd company a £12,570 salary with the rest taken as dividends and £2,000 of expenses. Change any of them in the calculator below.
Your details
£
£
£
AssumptionsOutside IR35: Optimal Ltd Co structure, salary set to personal allowance (£12,570). All remaining profit taken as dividends.
Inside IR35 (umbrella)
£45,583
£3,799 per month
Tax burden: 33.9%
Gross income£69,000
Employer NI & levy−£8,610
Income tax−£11,588
Employee NI−£3,218
Take home£45,583
Outside IR35 (Ltd Co)· keeps more
£49,751
£4,146 per month
Tax burden: 27.9%
Gross revenue£69,000
Employer NI−£1,136
Expenses−£2,000
Corporation tax−£10,179
Dividend tax−£5,935
Take home£49,751
Annual gross
£69,000
Daily rate
£300
Working days/yr
230
Estimates only. Inside IR35 assumes an umbrella company deducts employer NI and the apprenticeship levy, before its own margin. Outside assumes a £12,570 Ltd Co salary. Individual circumstances vary — consult a contractor accountant for personalised advice.