Umbrella vs limited company on £350 a day
| Inside IR35 (umbrella) | Outside IR35 (Ltd company) | |
|---|---|---|
| Gross contract income | £80,500 | £80,500 |
| Employer NI and levy | −£10,154 | −£1,136 |
| Business expenses | — | −£2,000 |
| Corporation tax | — | −£12,599 |
| Income tax | −£15,571 | −£0 |
| Employee NI | −£3,418 | — |
| Dividend tax | — | −£9,181 |
| Take-home per year | £51,358 | £55,585 |
| Per month | £4,280 | £4,632 |
| Per week | £988 | £1,069 |
| Share of gross kept | 63.8% | 69.0% |
Inside IR35 your salary of £70,346 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 £64,795 sits in the marginal relief band, so corporation tax works out between 19% and 25% (£12,599 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
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AssumptionsOutside IR35: Optimal Ltd Co structure, salary set to personal allowance (£12,570). All remaining profit taken as dividends.
Inside IR35 (umbrella)
£51,358
£4,280 per month
Tax burden: 36.2%
Gross income£80,500
Employer NI & levy−£10,154
Income tax−£15,571
Employee NI−£3,418
Take home£51,358
Outside IR35 (Ltd Co)· keeps more
£55,585
£4,632 per month
Tax burden: 31.0%
Gross revenue£80,500
Employer NI−£1,136
Expenses−£2,000
Corporation tax−£12,599
Dividend tax−£9,181
Take home£55,585
Annual gross
£80,500
Daily rate
£350
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.