Question 1

What is the take-home pay for a £300/day contractor in 2026-27?

Accepted Answer

At £300/day (220 days = £66,000/year), inside IR35 take-home is £44,348/year. Outside IR35 via Ltd Co take-home is £49,211/year — £4,863 more. Outside IR35 wins at this rate.

Question 2

How is inside IR35 tax calculated for £300/day?

Accepted Answer

Inside IR35 at £300/day (£66,000/year): personal allowance £12,570, basic rate 20% on £12,571–£50,270, higher rate 40% on £50,271–£66,000, NI 8% on £12,571–£50,270 and 2% above. Total deductions approximately £21,652 leaving £44,348 take-home.

Question 3

How is outside IR35 Ltd Co tax calculated for £300/day?

Accepted Answer

Outside IR35 at £300/day: salary £12,570 (zero tax/NI). Remaining £53,430 profit: minus £9,100 small companies threshold × 19% corp tax = £8,461. Remaining £44,969 as dividends: £500 allowance tax-free, £37,700 at 10.75% basic rate = £4,053, £6,769 at 35.75% higher rate = £2,420. Take-home £49,211.

Question 4

Did the dividend tax rate change in 2026?

Accepted Answer

Yes. From April 2026, the dividend ordinary rate rose to 10.75% (from 8.75%) and the higher rate to 35.75% (from 33.75%). This reduced outside IR35 take-home for Ltd Co contractors by approximately £500–£1,000/year depending on income level.

Question 5

Is IR35 status a choice for the contractor?

Accepted Answer

No. IR35 status is a legal determination based on the nature of the working arrangement. For public sector and medium/large private sector clients, the client (end user) makes the status determination. Contractors cannot simply choose to operate outside IR35 — the engagement terms and working practices must genuinely reflect self-employment.

Day Rate	Annual	Inside IR35	Outside IR35	Difference
£300/day	£66,000	£44,348	£49,211	+£4,863
£350/day	£77,000	£50,548	£55,932	+£5,384
£400/day	£88,000	£56,748	£62,653	+£5,905
£450/day	£99,000	£62,948	£67,893	+£4,945
£500/day	£110,000	£68,468	£73,134	+£4,666
£550/day	£121,000	£73,218	£78,374	+£5,156
£600/day	£132,000	£78,818	£83,614	+£4,796
£650/day	£143,000	£83,568	£88,854	+£5,286
£700/day	£154,000	£88,318	£94,094	+£5,776
£750/day	£165,000	£93,068	£99,334	+£6,266
£800/day	£176,000	£97,818	£104,574	+£6,756
£1000/day	£220,000	£117,818	£126,574	+£8,756

£300/Day Rate Take-Home 2026-27 — Inside vs Outside IR35

Day Rate Comparison — 2026-27

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