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How will IR35 affect my take home pay

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Phil Snowball

How much will my net pay change with IR35?

With IR35 changes just around the corner and one of the larger veterinary groups implementing the changes early in January I thought it would be a good idea to run through how the changes are likely to affect your take home pay.

This example if based on a veterinary surgeon earning £300 a day gross and working 5 days a week for 44 weeks of the year giving a gross annual salary of £66,000

Working through a Limited company your net weekly take home pay after tax, national insurance and any other deductions will be around £1,140.00 a week. You will also need to take into account expenses incurred in running your limited company such as accountancy fees and VDS insurance which work out at around £35 a week on average.

Working through an Umbrella company, your net weekly take home pay will be around £965.00 a week. This is the amount you will receive after all deductions are made and it's worth bearing in mind that some umbrella companies such as I4 provide professional indemnity insurance (VDS) free of charge.

Some of the large veterinary groups such as IVC are giving locums the opportunity to work through their company PAYE scheme, working this way your net weekly take home pay will be around £1,065 a week. However there are some drawbacks, you will very likely be paid a month in arrears rather than weekly in arrears and as the company will be liable for Employers NI and all of the associated payroll costs there could be downward pressures on pay rates.

As you can see the difference in net take home pay between working through an umbrella and working through a limited company, taking into account the costs of operating a limited company, are around £30 a day.

Vet working 5 days per week at £300 per day (Weekly Net Pay)

  • Limited Company - £1,140
  • Self Employed Sole Trader - £1,066
  • Employers PAYE Scheme - £1,065
  • Umbrella Company - £965

RVN working 40 hours per week at £17 per hour (Weekly Net Pay)

  • Limited Company - £571
  • Self Employed Sole Trader - £545
  • Employers PAYE Scheme- £543
  • Umbrella Company -  £485

If you would like further information on IR35 we have a number of videos you can view on our website, we are also happy to answer any questions or concerns you may have.

Recruit4vets are preferred suppliers for all of the main veterinary groups and we are pay all our locums directly on a Wednesday following your week worked. If you are interested in locuming through Recruit4vets please contact us at locum@recruit4vets.co.uk or call 01423 701 321

The examples above assumes there are no expenses to claim, you have opted out of any pension scheme, includes holiday pay, assumes a tax code of 1250L and doesn't take into account any accountancy fees involved in operating a limited company. The take home pay for a umbrella company will vary depending on which umbrella company is used.

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