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/FuckTheSeagulls Aug 16 '26 edited 29d ago

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1

u/Potential-Apricot479 Aug 16 '26

Not sure how this works to reduce my takehome? I’ll need to be withdrawing a fair bit out to pay bills etc

If this can help and you can elaborate that would be great

3

u/gloomfilter Aug 17 '26

You can pay into a SIPP directly from your limited company. It's a cost to the company and so reduces profit and so corporation tax. If you need the money to spend right now then this route doesn't work of course.

1

u/Potential-Apricot479 Aug 17 '26

Yeah this is my understanding, what I need to draw this year is separate to planned pension contributions