Umbrella vs limited company on £400 a day
| Inside IR35 (umbrella) | Outside IR35 (Ltd company) | |
|---|---|---|
| Gross contract income | £92,000 | £92,000 |
| Employer NI and levy | −£11,697 | −£1,136 |
| Business expenses | — | −£2,000 |
| Corporation tax | — | −£15,098 |
| Income tax | −£19,553 | −£0 |
| Employee NI | −£3,617 | — |
| Dividend tax | — | −£12,399 |
| Take-home per year | £57,133 | £61,368 |
| Per month | £4,761 | £5,114 |
| Per week | £1,099 | £1,180 |
| Share of gross kept | 62.1% | 66.7% |
Inside IR35 your salary of £80,303 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 £76,295 sits in the marginal relief band, so corporation tax works out between 19% and 25% (£15,098 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)
£57,133
£4,761 per month
Tax burden: 37.9%
Gross income£92,000
Employer NI & levy−£11,697
Income tax−£19,553
Employee NI−£3,617
Take home£57,133
Outside IR35 (Ltd Co)· keeps more
£61,368
£5,114 per month
Tax burden: 33.3%
Gross revenue£92,000
Employer NI−£1,136
Expenses−£2,000
Corporation tax−£15,098
Dividend tax−£12,399
Take home£61,368
Annual gross
£92,000
Daily rate
£400
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.