Umbrella vs limited company on £800 a day
| Inside IR35 (umbrella) | Outside IR35 (Ltd company) | |
|---|---|---|
| Gross contract income | £184,000 | £184,000 |
| Employer NI and levy | −£24,043 | −£1,136 |
| Business expenses | — | −£2,000 |
| Corporation tax | — | −£37,948 |
| Income tax | −£55,670 | −£0 |
| Employee NI | −£5,210 | — |
| Dividend tax | — | −£37,760 |
| Take-home per year | £99,077 | £105,156 |
| Per month | £8,256 | £8,763 |
| Per week | £1,905 | £2,022 |
| Share of gross kept | 53.8% | 57.2% |
Inside IR35 your salary of £159,957 is over £100,000, so the personal allowance is withdrawn at £1 for every £2 above it. Between £100,000 and £125,140 that works out as a 60% marginal rate, which is why pension contributions are worth a close look at this rate.
Outside IR35 your company profit of £168,295 sits in the marginal relief band, so corporation tax works out between 19% and 25% (£37,948 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)
£99,077
£8,256 per month
Tax burden: 46.2%
Gross income£184,000
Employer NI & levy−£24,043
Income tax−£55,670
Employee NI−£5,210
Take home£99,077
Outside IR35 (Ltd Co)· keeps more
£105,156
£8,763 per month
Tax burden: 42.8%
Gross revenue£184,000
Employer NI−£1,136
Expenses−£2,000
Corporation tax−£37,948
Dividend tax−£37,760
Take home£105,156
Annual gross
£184,000
Daily rate
£800
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.