Project manager contractor on £143,000

Inside-IR35 Umbrella. Inside IR35. Age 42. 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

£69,898

Pension

£21,450

Effective rate

36.1%

Marginal rate

42%

The decision tree for a project manager contractor at this income level

A project manager 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 £143,000 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 inside-IR35 umbrella 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 £143,000. The PA tapers to zero. Consider personal pension contributions / salary sacrifice to reclaim the taper-zone marginal.
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: £21,450.
What is the resulting net cash? £69,898. Net wealth including pension: £91,348.

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

Day rate	£650
Contract value (220 days)	£143,000
Inside-IR35 net cash	£69,898
Inside-IR35 pension	£21,450
Outside-IR35 net cash	£75,551
Outside-IR35 pension	£21,000
Cost of being inside IR35 (net wealth)	£5,204
Break-even outside-IR35 day rate	£724

Why this scenario is different

Compared to the closest peer profile — IT contractor at £143,000 — 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 break-even outside-IR35 day rate moves from £724 to £724 per day.

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.

Can I take more than the optimum out of the company?

Of course — every £1 above the optimum simply costs more in tax than it gains in cash. The optimiser tells you the maximum-net-wealth point, not a legal limit. Past the optimum the marginal cost of extraction climbs steeply (60% effective in the PA-taper band, 39.35% additional-rate dividend above £125,140).

Why does the optimiser disagree with my accountant?

Often because the accountant is optimising salary first, pension second, dividend as residual — three sequential one-variable problems. The BracketMath optimiser does the joint problem: every (salary, pension) cell evaluated through the full tax stack, accounting for the four-band salary problem, the £100k taper, the CT marginal-relief band, and the Annual Allowance taper simultaneously. The improvement is typically £2k–£35k/yr at typical income levels.

What happens to my pension at age 55 / 57?

From age 55 (rising to 57 from 6 April 2028 per the Finance Act 2021) you can access defined-contribution pensions. The first 25% of the pot is tax-free (the "Pension Commencement Lump Sum"), subject to the £268,275 Lump Sum Allowance. The remainder is drawable at your marginal income-tax rate — but you can phase it across decumulation years to keep most of it within the 20% basic-rate band.

How much can I put into pension this year?

The 2026/27 pension Annual Allowance is £60,000. Below £260,000 of adjusted income the full £60,000 Annual Allowance is available. Carry-forward of unused AA from the last three tax years is available subject to membership-in-each-year rules.

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.