IR35 Calculator – How much will it cost you?

Our IR35 calculator will work out how much more tax you will have to pay if your contract work is caught by the IR35 rules.

How to use the IR35 calculator

• Fill in the yellow boxes to calculate your net income – inside and outside IR35.
• The calculator assumes you work 5 days per week, 44 weeks per year.
• Travel expenses cover any travel, subsistence and accommodation costs incurred on contract duty, and falling within the HMRC Travel Rules for site-based employees.
• Pension contributions are payments to schemes made via your limited company.

You can get comprehensive tax investigation (IR35) insurance for as little as £99 per year. A comprehensive option – TLC35 – will even cover the costs of any tax liabilities you may have. Take a look at the options here at Qdos.

Notes

• Read our complete guide to IR35 for background information on the Intermediaries Legislation.
• This calculator shows the effect of the current IR35 rules on your income (Section 8 of the ITEPA 2003), not the postponed April 2021 ‘Off-Payroll’ rules (Section 10).
• For the sake of simplicity, the calculator ignores the Employment Allowance, and Corporation Tax is applied at the prevailing rate of 19%.
• All tax rates used in the calculations are for the 2020/21 tax year.
• (*) If your work is caught by IR35, the company can claim a fixed ‘5% allowance’, equal to 5% of your annual turnover – to cover business expenses (such as accountancy fees). This is used to work out your inside-IR35 ‘deemed payment’. However, Corporation Tax may still payable on this 5% allowance, although in practice, most contractors incur at least the same amount each year in allowable business expenses. So, the Corporation Tax amount in the summary for inside-IR35 will become zero if you incur business expenses equal to or greater than 5% of turnover. The 5% allowance is not available if you are caught by the Off-Payroll rules (after April 2017 for public sector clients, and post-April 2021 for private sector clients).
• Different income tax bands and rates apply if you live in Scotland, so your total tax bill may be different to that displayed above.
• Our calculator was created by an ACA-qualified accountant, however, you should always consult your own accountant before using any information published on our site.