Whilst searching the internet, you may find several types of IR35 calculators which will tell your recommended take-home pay when working inside or outside IR35.
Some will ask you to simply enter your daily/hourly rate along with whether you work inside or outside IR35, whereas others like the HM Revenue and Customs calculator, works out how much you need to pay to HMRC if your contract falls inside IR35. HMRC’s ‘IR35 Status check tool’ can be found here: https://www.gov.uk/guidance/check-employment-status-for-tax
The issue with using an online IR35 calculator is that no two contracts are the same, which makes it near impossible to get an accurate calculation. Also calculating take-home pay whether you are inside or outside IR35 is quite complicated and very much dependent on quite a few variables which even include your short, medium and long-term business goals and aspirations never mind your daily rate, approximate expenses, attitude to pensions or likely capital purchases.
We provide a handy contractor calculator which will help you to understand roughly how much your take-home could be given a specific daily rate. However, for a more detailed understanding of the complexities on how to set up a Limited company, start contracting or managing your own Limited company it’s best to speak to an expert (we are of course very happy to help just call our new business team on 01442 275789 or email email@example.com).
This page will give you a broad idea of what happens if your contract is inside IR35 along with the implications of how your take-home pay is affected. It includes things like how The Flat Rate VAT scheme works and benefits contractor, what expenses can be claimed, special schemes you can still take advantage of such as such as use of home, cycle to work schemes, childcare vouchers and annual party allowances plus and it might not seem much now what with interest rates being so low but interest on your business bank account.
SJD Accountancy has a wealth of knowledge in reviewing contracts for their IR35 status and can offer a free verbal IR35 contract review. If you would like us to review your contract and day to day practices or at all worried by IR35 please call our IR35 specialists on 01442 275789 or email firstname.lastname@example.org. Or for a more detailed written review please visit this page ‘IR35 contract review’.
You may also find our IR35 Business Entity Tests page helpful.