IR35 calculator

To help you understand the impact of IR35 on your income we’ve created this handy IR35 calculator. Simply enter your day rate to calculate the impact of IR35 on your monthly take home pay.

What is IR35?

IR35 was HMRC’s (then the Inland Revenue) response to the growing number of employees leaving their permanent roles, setting up their own businesses and then returning to perform their old role as a contractor to avoid paying tax and National Insurance at the higher rates. It aims to ensure that contractors working essentially as ‘disguised employees’ and the employer pays the same level of tax through PAYE and national insurance as if the contractor were an employee.

As of April 2017, IR35 has undergone some significant changes. These changes specifically impact independent professionals working in the public sector. The requirement for effectively applying PAYE and National Insurance Contributions (NICs) will pass from the independent professional to the public sector engager or sourcing agency. Public bodies will now need to decide if they are engaging a contractor that is legitimately self-employed or whether they should be subject to PAYE and NICs like any other employee. This change will mean many contractors will be brought within PAYE and NICs.

If you are not certain of your status we recommend speaking with an expert in IR35 legislation. IR35 is a legal matter and not one for accountants to give ‘their opinion’. inniAccounts recommends The Law Place that for a small fee can complete an IR35 assessment. You can read more about IR35 on our Knowledge Hub.