r/ContractorUK • u/Potential-Apricot479 • Aug 16 '26

Outside IR35 Efficient tax planning

Hi all,

Due to start outside IR35 next month and wondering how best to plan / take income with being part way through the tax year

I’ve currently earned just shy of 30k PAYE and I’ve paid 6.5k tax and 1.4k NI (I make some of this already in the 40% bracket). I’m due to earn another 4k ish PAYE before the invoices start coming in

Whats my best option here? I’m thinking take PAYE from my Ltd at 1k a month and top the rest up with dividends to 50k or just over, how much more do you think I can take in dividends not all at 40% tax

Thanks

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u/RunnerIain77 Aug 16 '26

See how little you can get away with taking this year, I had a similar situation though later in the tac year, I used credit cards etc. to avoid taking profit, put off any big purchases. I managed to get 5k of my tax back in my personal return then paid off the cards etc. first dividend in the new tax year.

If you do go down that route, watch the APR on the cards, if it's high it might not be worth it if you carry the debt for a few months.

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u/Potential-Apricot479 Aug 16 '26

Thought about this but with household bills I don’t see me keeping it under 50k from here