Quick Answer — IR35 2026-27

On a £/day × 220 days (£0/yr): inside IR35 £0/year, outside IR35 (Ltd Co.) £12,570/year — outside IR35 pays £12,570 more in 2026-27.

Inside IR35
£0
Outside IR35 (Ltd)
£12,570
Difference
+£12,570
Dividend tax
10.75% basic
💡 April 2026: Dividend tax rose to 10.75% basic rate. At rates below ~£600/day, inside IR35 now often beats outside IR35. The crossover moved from ~£450/day to ~£600/day vs last year.
IR35 Contractor Tools 2026-27

IR35 Contractor Calculator 2026-27

Compare PAYE inside IR35 vs Limited Company outside IR35 for any day rate. Updated for 10.75% dividend tax from April 2026.

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Your Contract Details

Exc. VAT
£
Typical: 220
5%
Annual contract value£0
Inside IR35 (PAYE)
£0
£0.00/month
Income Tax: -£0
NI: -£0
Pension: -£0
Outside IR35 (Ltd Co.)
£12,570
£1,047.50/month
Corp. tax: -£0
Div. tax: -£0
Net dividends: £0

Inside vs Outside IR35 — Rate Comparison

Annual take-home at 220 days, 5% pension. 2026-27 including 10.75% dividend tax.

Day RateAnnual RevenueInside IR35Outside IR35 (Ltd)Difference
£350/day£77,000£52,907£50,969£1,939 PAYE
£400/day£88,000£58,957£56,694£2,264 PAYE
£500/day£110,000£69,205£68,143£1,063 PAYE
£600/day£132,000£75,616£79,592+£3,976 Ltd
£750/day£165,000£92,199£96,766+£4,567 Ltd
⚠️ Key 2026-27 change: Dividend tax rose from 8.75% to 10.75% basic rate from April 2026. Outside IR35 advantage reduced by ~£1,500–£2,500/yr. The crossover point moved from ~£450/day to ~£600/day.

How the Calculation Works

Inside IR35 — PAYE
▸
Gross revenue: Day rate × days worked
▸
Income Tax: 20% up to £50,270, 40% above (after £12,570 PA)
▸
National Insurance: 8% on £12,570–£50,270, 2% above
▸
Pension: Salary sacrifice reduces taxable income
▸
Take-home: Gross − income tax − NI − pension
Outside IR35 — Limited Company
▸
Director salary: £12,570 (tax-free, preserves State Pension NI)
▸
Corporation tax: 19% on profits above £9,100 (small companies)
▸
Dividends: Remaining profit extracted as dividends
▸
Dividend allowance: First £500 tax-free
▸
Dividend tax: 10.75% basic / 35.75% higher rate (2026-27)
▸
Take-home: Salary + dividends after dividend tax

IR35 Frequently Asked Questions

Key IR35 questions for contractors in 2026-27.

Related Contractor & Tax Tools

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IR35 Guide 2026-27
Full inside vs outside comparison article
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Affects contractors earning above £100k annually
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Hourly Rate Calculator
Convert day rate to annual equivalent
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Job Comparison Calculator
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Important — IR35 is a legal determination

IR35 status is determined by actual working practices, not by contract or preference. This calculator shows indicative take-home comparisons only — it does not constitute legal or tax advice. Always seek qualified advice from an IR35 specialist or accountant. Dividend tax rates confirmed for the 2026-27 tax year (April 2026 to April 2027).