IR35 Calculator: Inside vs Outside (2025/26).

Inside IR35 means the engagement is treated as employment for tax purposes. The fee-payer (your agency or end client) deducts employer NI from the contract value first, then runs the remainder through PAYE — so you receive a net amount equivalent to an employee on the same gross salary, without any take-home benefit from operating through a limited company.

It depends on day rate and contract length, but for a £500 day rate across 220 working days, contracting outside IR35 with a low salary plus dividends typically nets around £8,000–£15,000 more per year than the inside-IR35 equivalent. The calculator above shows your exact figure.

For public-sector engagements and medium/large private-sector clients, the end client (or fee-payer) decides status and issues a Status Determination Statement (SDS). For small clients, the contractor's own limited company still decides. HMRC's CEST tool is the most common assessment route, though many advisers (Countify included) treat its output as guidance, not gospel.

Most travel and subsistence expenses are not deductible inside IR35 — the 'deemed employee' is treated as a permanent employee at the client's site for tax purposes. Outside IR35, a limited-company director can claim reasonable business expenses.

Not really. The status applies to the engagement as a whole. Different contracts with different clients can have different statuses, and Countify recommends a working-practices review for each new contract — particularly if you are mid-renewal.