HMRC Off-Payroll WorkingInside vs Outside IR35CEST Tool Rules
IR35 Off-Payroll Working Tax Calculator
Calculate net take-home pay for contractors operating Inside IR35 (PAYE / Umbrella) vs. Outside IR35 (Personal Service Company) under HMRC tax rules.
IR35 Net Take-Home Pay Calculator
Estimate your annual take-home pay under both status determinations
£
Gross Annual Contract Turnover: £121000
Inside IR35 Annual Take-Home
£78650
PAYE Deductions AppliedOutside IR35 Annual Take-Home
£94380
+£15730 More Take-HomeComplete Guide to HMRC IR35 Off-Payroll Rules
IR35 (Chapter 10 of the Income Tax (Earnings and Pensions) Act 2003) is anti-tax-avoidance legislation designed to ensure contractors working like employees pay the same Income Tax and National Insurance contributions as permanent staff.
Key Criteria for IR35 Status Determination
| IR35 Status Factor | Outside IR35 Characteristics | Inside IR35 Characteristics |
|---|---|---|
| Right of Substitution | Genuine right to send a qualified substitute worker | Personal service required; substitute not permitted |
| Control | Contractor decides how, when, and where work is done | Client specifies exact working hours, location & supervision |
| Mutuality of Obligation (MOO) | No obligation for client to offer or contractor to accept work | Expectation of ongoing continuous work and payment |
| Financial Risk | Invests in equipment, holds professional indemnity insurance | Uses client equipment, paid hourly/daily without financial risk |
Frequently Asked Questions
Inside IR35 means you are deemed an employee for tax purposes, requiring your fee payer to deduct Income Tax and Employee National Insurance via PAYE before paying you. Outside IR35 means you operate as a genuine self-employed business contractor and can pay yourself via a combination of salary and tax-efficient dividends.
For medium and large-sized private sector clients and all public sector bodies, the end-client is legally responsible for issuing a Status Determination Statement (SDS). For small private clients, the contractor determines their own status.
Yes. Most contractors working on contracts deemed Inside IR35 use an FCSA-accredited umbrella company. The umbrella company acts as your employer, deducting PAYE Income Tax, Employee NI, and Employer NI before paying your net salary.