Umbrella vs limited company on £450 a day
| Inside IR35 (umbrella) | Outside IR35 (Ltd company) | |
|---|---|---|
| Gross contract income | £103,500 | £103,500 |
| Employer NI and levy | −£13,240 | −£1,136 |
| Business expenses | — | −£2,000 |
| Corporation tax | — | −£17,676 |
| Income tax | −£23,536 | −£0 |
| Employee NI | −£3,816 | — |
| Dividend tax | — | −£15,588 |
| Take-home per year | £62,908 | £67,100 |
| Per month | £5,242 | £5,592 |
| Per week | £1,210 | £1,290 |
| Share of gross kept | 60.8% | 64.8% |
Inside IR35 your salary of £90,260 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 £87,795 sits in the marginal relief band, so corporation tax works out between 19% and 25% (£17,676 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)
£62,908
£5,242 per month
Tax burden: 39.2%
Gross income£103,500
Employer NI & levy−£13,240
Income tax−£23,536
Employee NI−£3,816
Take home£62,908
Outside IR35 (Ltd Co)· keeps more
£67,100
£5,592 per month
Tax burden: 35.2%
Gross revenue£103,500
Employer NI−£1,136
Expenses−£2,000
Corporation tax−£17,676
Dividend tax−£15,588
Take home£67,100
Annual gross
£103,500
Daily rate
£450
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.