Hi all,
I've fed an Outside IR35 rate into ContractorCalculator's financial profile calculator. I've then taken the same rate as a PAYE rate, multiplied by 220 and entered it into a PAYE calculator. Both monthly figures returned are around the same.
It seems that if you're on an outside IR35 rate, and you take the entire amount earned out of your limited company in the same tax year, there's not really any difference to if you earned it on a PAYE basis. Clearly there is a difference if you take smaller amounts out of the limited company in the tax year, or if the inside rate wasn't PAYE (i.e. brolly). The general mantra is that outside is always better than inside - and it usually is, but not necessarily in this scenario. Any thoughts?
I've fed an Outside IR35 rate into ContractorCalculator's financial profile calculator. I've then taken the same rate as a PAYE rate, multiplied by 220 and entered it into a PAYE calculator. Both monthly figures returned are around the same.
It seems that if you're on an outside IR35 rate, and you take the entire amount earned out of your limited company in the same tax year, there's not really any difference to if you earned it on a PAYE basis. Clearly there is a difference if you take smaller amounts out of the limited company in the tax year, or if the inside rate wasn't PAYE (i.e. brolly). The general mantra is that outside is always better than inside - and it usually is, but not necessarily in this scenario. Any thoughts?
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