Can I still use a limited company inside IR35?

You can, but the tax advantage is gone: the fee payer deducts PAYE and National Insurance from a deemed payment before it reaches your company. You keep the administrative cost without the benefit, which is why most people inside IR35 use an umbrella instead.

Who decides my IR35 status?

For most engagements the client does, and must issue a Status Determination Statement with reasons. Smaller clients meeting the exemption criteria are treated differently. There is a formal route to challenge a determination you disagree with.

Does a substitution clause put me outside IR35?

Only if it is real. The test looks at how the engagement actually works, so a clause the client would never honour carries little weight. Genuine, exercisable substitution is one of the strongest indicators of being outside.

Does the calculator work for inside-IR35 contracts?

No, and it says so on the page. The comparison assumes an outside-IR35 engagement. Inside IR35 the limited company route offers no tax advantage, so comparing the two is not a real choice.

Inside or Outside IR35 — and Why It Decides Everything Else

IR35 asks a single question: if the intermediary company were removed, would you look like an employee of the client? If the answer is yes the engagement is inside IR35, and the tax is broadly what an employee would pay. That one answer decides whether running a limited company still makes financial sense, which is why every umbrella-versus-limited comparison is meaningless until you know your status.

The umbrella vs limited calculator assumes an outside-IR35 contract — check your status first, then run your day rate through it.

Why Status Comes Before the Comparison, Not After

Outside IR35, a limited company lets you take a small salary and the rest as dividends, which is taxed differently and usually leaves more in your pocket. Inside IR35, that route is closed: the fee payer operates PAYE on a deemed payment, so the tax lands broadly where it would for an employee, and the company adds accountancy fees and filing obligations without a compensating benefit. This is why a calculator that shows limited winning by thousands is actively misleading if the contract is inside IR35 — it is answering a question you are not allowed to ask. Establish status first; everything downstream depends on it.

Who Decides, and Why That Changed

For most engagements the decision no longer belongs to you. Responsibility for determining status sits with the client, and the client must give you a Status Determination Statement explaining the reasoning. Smaller clients meeting the exemption criteria are treated differently, which is why two contractors doing near-identical work can end up on opposite sides. If you disagree with a determination there is a formal route to challenge it, and the client is required to respond with reasons. Do not treat a determination as final simply because it arrived on headed paper — but equally, do not ignore one because you dislike it.

What the Test Actually Looks At

The assessment weighs the reality of the working relationship, not the wording of the contract. Three factors carry most of the weight. Control: does the client direct how, when and where you work, or do you decide? Substitution: could you genuinely send a suitably qualified replacement, and would the client accept? Mutuality of obligation: is the client obliged to offer work and you to accept it, beyond the specific engagement? Contractual clauses that contradict day-to-day practice tend to be disregarded, so a substitution clause nobody would ever honour does not help. Being in the client's team structure, using their equipment and attending their internal meetings all point inside.

The Umbrella Change That Arrived in April 2026

From 6 April 2026 responsibility for operating PAYE on umbrella workers moved to the agency or, where there is no agency, the end client. This does not change the arithmetic of your payslip, but it changes who carries the risk, and that has made agencies noticeably more cautious about which arrangements they will work with. In practice contractors are seeing fewer options offered and more insistence on particular umbrellas. If you are weighing umbrella against limited, factor in what your agency will actually permit, not just what is theoretically available.