Agile coach contractor on £160,000

Personal Ltd Co. Outside IR35. Age 44. Pension preference: aggressive.

Every figure on this page is computed at build time by the same engines that power the live salary–dividend split, take-home and SIPP optimiser calculators. Inputs come from a single CSV row; outputs come from the engines. No static lookup tables, no hand-coded numbers.

Net cash

£66,543

Pension

£60,000

Effective rate

20.9%

Marginal rate

33.8%

The decision tree for a agile coach contractor at this income level

A agile coach contractor thinking through "how should I structure this income for tax efficiency" hits the same five branches every time. Walk the tree for this exact scenario (gross £160,000 for 2026/27):

Is the engagement inside or outside IR35? Inside (umbrella) means no dividend extraction, no employer pension dodge, full PAYE deduction. Outside (Ltd Co) means access to the optimiser. This row models the outside-IR35 Ltd Co route.
Are you using the £12,570 Personal Allowance? Yes — fully. No other personal income is in play, so all £12,570 of PA is available to absorb the cheapest slice of structure-specific income.
Are you above the £100,000 PA taper? Yes — adjusted net income is roughly £160,000. The PA tapers to zero. The optimiser is steering the next slice of extraction into employer pension to dodge the 60% taper marginal rate.
How heavily are you using the pension wrapper? Aggressively — the search treats £1 of pension as worth £1 of cash, maximising long-run net wealth. The pension contribution chosen by the engine for this row: £60,000.
What is the resulting net cash? £66,543. Net wealth including pension: £126,543.

For the second-order question — what would happen at a different profit level, a different age, or a different pension preference — the same engine drives the salary-dividend split calculator, the take-home (inside vs outside IR35) calculator, and the SIPP optimiser. Each one accepts the inputs of this row as a starting point.

The numbers, line by line

Optimum salary	£12,570
Optimum dividend	£67,176
Optimum pension	£60,000
Net cash (optimum)	£66,543
Net wealth (cash + pension)	£126,543
Rule-of-thumb net cash	£93,375
Rule-of-thumb net wealth	£93,375
Saving vs rule of thumb	£33,168
Effective rate on profit	20.9%
Marginal rate (next £1 dividend)	33.8%

Why this scenario is different

Compared to the closest peer profile — Software contractor at £160,000 — this scenario sits £0 higher on gross income. That moves net cash by +£0, the pension contribution by +£0, and the effective rate by +0%. The effective rate moves only modestly — both scenarios sit inside the same binding tax band. The optimiser shifts £0 of the extraction out of the dividend slice, and £0 out of pension contributions.

Questions this scenario raises

How do I avoid the 60% taper?

For a salaried employee: salary sacrifice into pension. For a Ltd Co director: employer pension contribution. For a sole trader: personal pension contributions (which reduce adjusted net income). The taper-zone marginal of 60% means each £1 of pension contribution effectively costs the saver 40p of foregone cash — the strongest tax shelter the UK code currently offers.

Should I take dividends now or wait until next tax year?

Tax-year-end timing matters: a dividend declared in March 2027 is taxed at 2026/27 rates; one declared in April 2027 falls into 2027/28 (potentially still in the same calendar year). If your 2026/27 personal income is bunched in basic-rate territory and 2027/28 will be in higher-rate, accelerate. If the reverse, defer. The mathematical structure is "level the tax-band utilisation across years if income is volatile."

Are the engine assumptions documented anywhere?

Yes — every constant lives in src/lib/tax/constants.ts with a source-URL comment. Every engine function is unit-tested against HMRC examples (180+ test cases). The full methodology is at /about and the per-engine assumptions are spelled out at the foot of each calculator.

How is corporation tax calculated in this scenario?

The taxable post-pay profit falls in the £50,000–£250,000 "marginal-relief band". Corporation tax is computed as 25% of taxable profits minus marginal relief, producing an effective marginal rate of 26.5% on each pound between the two thresholds.

How many qualifying years do I need for the full new State Pension?

35 qualifying years for the full new State Pension. With fewer, the pension is pro-rated (1/35 per year). A minimum of 10 qualifying years is required for any new State Pension. Voluntary Class 2 (sole traders) or Class 3 (everyone else) can plug gaps in the NI record.

Methodology

Income tax, National Insurance and Corporation Tax bands taken from HMRC's 2026/27 rates and allowances tables (gov.uk/.../income-tax; corporation-tax). Pension Annual Allowance and taper rules from Finance Act 2004 / 2023. Trading allowance per ITTOIA 2005 s.783A. Voluntary Class 2 figure (£179.40/yr = £3.45/wk × 52) from HMRC voluntary NI guidance.

Style: 2026/27 tax year throughout; figures rounded to whole pounds in the user-facing prose; effective rates computed as (deductions / gross). The voice is methodological — no first person, no claimed credentials, no marketing fluff.

This page is not personalised advice; for advice regulated by the FCA, consult an adviser registered with the Financial Conduct Authority. See the full disclaimer.