Management consultant on £120,000

Personal Ltd Co. Outside IR35. Age 36. 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

£46,831

Pension

£60,000

Effective rate

11%

Marginal rate

8.8%

Worked example: Management consultant, 36, £120,000 of company profit

Picture a management consultant aged 36 for the 2026/27 tax year, operating through a personal Ltd Co outside IR35, with £120,000 of profit before director pay. The optimisation goal for this profile is maximum net wealth (treating £1 of pension as £1 of cash today).

Running the engine for this exact profile:

Optimum salary: £12,570
Optimum dividend: £37,499
Optimum pension contribution: £60,000
Net cash to the director: £46,831
Net wealth (cash + pension): £106,831
Total tax + NI through the chain: £13,169 (11% effective on gross profit)
Money left on the table by the £12,570-salary rule of thumb: £30,549

The vignette is hypothetical but the numbers are not — every figure above was produced by the same engine code that powers the live BracketMath calculators, run at build time on inputs drawn from a single CSV row.

The numbers, line by line

Optimum salary	£12,570
Optimum dividend	£37,499
Optimum pension	£60,000
Net cash (optimum)	£46,831
Net wealth (cash + pension)	£106,831
Rule-of-thumb net cash	£76,282
Rule-of-thumb net wealth	£76,282
Saving vs rule of thumb	£30,549
Effective rate on profit	11%
Marginal rate (next £1 dividend)	8.8%

Why this scenario is different

Compared to the closest peer profile — DevOps contractor at £120,000 — 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

Does it include Scottish income tax?

No. Scotland has its own income-tax band schedule (Starter 19% / Basic 20% / Intermediate 21% / Higher 42% / Advanced 45% / Top 48% for 2026/27). National Insurance and corporation tax are still set at UK-wide rates. A Scotland-specific batch of programmatic pages is planned but is not in this batch.

Does this include the High Income Child Benefit Charge?

No. HICBC is not in the engine. If you or your partner earn over £60,000 and either of you claims Child Benefit, HICBC tapers the Child Benefit at 1% for every £200 of income over £60,000, fully eroded at £80,000 (2026/27 thresholds). This adds an effective 11% marginal between £60,000 and £80,000 for a one-child household, ~22% for two children, etc.

Does this calculation include student loan repayments?

No. Student Loan repayments (Plan 1 / 2 / 4 / 5 / Postgraduate) are not modelled in the BracketMath engines. Plan 2 repayments at 9% above £27,295 add roughly 9p of marginal cost to each £1 of taxable income above the threshold. Add this to the marginal rate quoted on this page if you have an outstanding student loan.

Does taking a £nil salary cost me a State Pension year?

Yes, if you take £0 salary and pay no Class 2 (sole traders) or Class 3 (Ltd Co directors) you will not earn a qualifying year for that tax year. Take at least the Lower Earnings Limit (£6,500 in 2026/27) as salary to earn a qualifying year automatically. Most directors take £12,570 (full PA) anyway, well above the LEL.

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.