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Instant answer for £900/day · 220 days
At £900/day (£198,000/year contract revenue), outside IR35 nets you £104,205/year through a limited company, versus £102,510/year inside IR35 via an umbrella. That's £1,695/year more (1.7%) outside IR35.
Outside IR35 take-home
£104,205
Effective rate 47.4%
Inside IR35 take-home
£102,510
Effective rate 48.2%
Difference
+£1,695
1.7% more outside IR35
Adjust the day rate, working days, expenses, or pension to explore other scenarios
230 days = 46 weeks billed, allowing for holiday and downtime
Equipment, software, training, travel. £1,500 accountancy already included.
Company pension (outside) or salary sacrifice (inside). Reduces taxable income.
Common day rates:
Limited company
£108,217
Effective tax rate: 47.7%
Umbrella company
£106,640
Effective tax rate: 48.5%
Being outside IR35 puts £1,577 more in your pocket per year (1.5% more than inside IR35)
Contract revenue: £207,000 · Working days: 230 · Day rate: £900
Calculations use 2026/27 UK tax rates. Outside IR35 assumes optimal salary/dividend structure with a fixed director salary of £12,570, employer NI at 15% above the £5,000 secondary threshold, and £1,500 accountancy fees. Inside IR35 assumes a compliant umbrella company deducting employer NI and the 0.5% apprenticeship levy before deemed salary. Pension contributions are assumed to be company contributions (outside) or salary sacrifice (inside). Figures are estimates only. Consult a qualified contractor accountant before making decisions.
Outside IR35 (limited company)
Contract revenue
£198,000
Salary
£12,570
Employer NI
−£1,136
Accountancy fees
−£1,500
Company profit
£182,794
Corporation tax
−£44,690
Dividends available
£138,104
Dividend tax
−£43,955
Net take-home
£104,205
Inside IR35 (umbrella)
Contract revenue
£198,000
Umbrella margin
−£1,040
Employer NI
−£24,927
Apprenticeship Levy (0.5%)
−£856
Deemed salary
£171,177
Income tax
−£63,233
Employee NI
−£5,434
Net take-home
£102,510
Assumes 220 billable days/year, £0 expenses, 0% pension contribution, single person with standard allowances. 2026/27 HMRC rates.
At £900/day over 220 billable days (£198,000 contract revenue), outside IR35 nets you £104,205 per year through a limited company, versus £102,510 per year inside IR35 via an umbrella. That is a difference of £1,695 per year (1.7% more), before accounting for accountancy fees you'd pay either way.
Operating through your own limited company at £900/day: salary of £12,570 (set to the personal allowance), employer NI of £1,136, accountancy fees of £1,500, leaving company profit of £182,794. After corporation tax of £44,690, dividends of £138,104 are available, taxed at £43,955. Total net take-home: £104,205/year, an effective deduction rate of 47.4%.
Working via an umbrella company at £900/day: after the umbrella margin of £1,040, employer NI of £24,927 and the 0.5% apprenticeship levy of £856 are deducted from your contract rate, your deemed salary is £171,177. Income tax of £63,233 and employee NI of £5,434 bring net take-home to £102,510/year, an effective deduction rate of 48.2%.
On company profit of £182,794 (after salary, employer NI, accountancy fees, and expenses are deducted from £198,000 contract revenue), corporation tax at £900/day is £44,690. This includes marginal relief tapering between the 19% small profits rate and 25% main rate.
Inside IR35, the umbrella deducts Employer NI of £24,927 and the apprenticeship levy of £856 from your £900/day contract rate before calculating your deemed salary of £171,177. This is a key reason inside-IR35 take-home is lower than many contractors expect: the employer NI comes out of the rate you're quoted, not on top of it.
At £900/day over 220 billable days per year (the standard assumption after holidays, bank holidays, and gaps between contracts), your gross contract revenue is £198,000. This is the figure both the outside and inside IR35 calculations above are based on.
The outside IR35 (limited company) figures are unaffected by Scottish rates since they rely on dividend tax and corporation tax, which are UK-wide. The inside IR35 figures use England, Wales, and Northern Ireland income tax bands. If you are a Scottish taxpayer working inside IR35, your income tax will differ slightly due to Scotland's separate rate bands.
Yes. Company pension contributions reduce company profit before corporation tax outside IR35, and reduce deemed salary via salary sacrifice inside IR35. Both routes receive meaningful tax relief, but the exact effect on the £1,695 gap shown above depends on how much you contribute: adjust the pension slider in the calculator below to see it recalculated live at £900/day.
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Figures use 2026/27 HMRC rates and assume 220 billable days/year, £0 expenses, and 0% pension contribution for a single person with standard allowances. Does not model Scottish income tax for the inside-IR35 figure, benefits in kind, or marginal corporation tax relief nuances. Always verify your IR35 status and tax position with a qualified accountant.