Inside IR35 Calculator

Inside IR35 means HMRC considers you a 'deemed employee' of the client, even though you work through your own limited company or an agency. Your income is taxed as employment income — PAYE income tax, employee NI, and employer NI are all deducted. Since April 2021, the client (not the contractor) is responsible for determining IR35 status in the private sector.

Typically 15-25% less than outside IR35. A contractor on £500/day outside IR35 might take home £80,000-£90,000 annually. Inside IR35 via an umbrella, the same rate yields £65,000-£75,000 after employer NI, umbrella fees, income tax, and employee NI. The exact difference depends on your day rate, personal allowance usage, and umbrella company fees.

Yes. If your client determines you are inside IR35, you can request the client's reasoning (Status Determination Statement) and formally disagree. The client must respond within 45 days. If you still disagree, you can appeal to HMRC or, ultimately, a tax tribunal. However, if you continue working on the engagement, you must accept the determination until it is changed.

An umbrella company becomes your employer and handles payroll when you work inside IR35. Your agency pays the umbrella, which deducts employer NI, its margin (typically £15-£30/week), income tax, and employee NI before paying you a net salary. Choose an FCSA-accredited umbrella to ensure compliance. Avoid any scheme promising abnormally high take-home percentages.

Yes, you should. A common approach is to increase your day rate by 15-20% to compensate for the additional employer NI and reduced tax efficiency. For example, if your outside IR35 rate is £500/day, an equivalent inside IR35 rate would be £575-£600/day. Many clients accept this uplift as they save on pension auto-enrolment and other employment costs.