Senior consultant on £250,000

Personal Ltd Co. Outside IR35. Age 54. 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

£106,832

Pension

£60,000

Effective rate

33.3%

Marginal rate

39.4%

How much tax does a senior consultant on £250,000 actually pay in 2026/27?

Short answer: £83,168 per year — an effective rate of 33.3% on gross company profit.

What's in that number? For a Ltd Co director the figure is the sum of five lines: corporation tax (£45,275), employer NI (£0), employee NI (£0), personal income tax (£1,000) and dividend tax (£36,893). The optimiser placed £5,000 of salary, £139,725 of dividend and £60,000 of employer pension contribution to produce that figure — the lowest total in the searched grid.

What's the marginal rate on the next £1? 39.4%. This is the number that matters for "is one more invoice worth the cost in lost benefits / extra effort?" decisions — it is always higher than the average effective rate.

How does this compare to PAYE employment at the same gross? The PAYE figure for a £250,000 salaried employee in 2026/27 is roughly £107,500 of combined income tax + employee NI. The structure-specific savings come from where the deductions sit, not whether they sit anywhere — see the contractor tax guide for the side-by-side maths.

The numbers, line by line

Optimum salary	£5,000
Optimum dividend	£139,725
Optimum pension	£60,000
Net cash (optimum)	£106,832
Net wealth (cash + pension)	£166,832
Rule-of-thumb net cash	£133,438
Rule-of-thumb net wealth	£133,438
Saving vs rule of thumb	£33,394
Effective rate on profit	33.3%
Marginal rate (next £1 dividend)	39.4%
Years to age-57 pension access	3
Annual pension contribution (this row)	£60,000
Projected pot at 57 (5% real, single-path)	£189,150
Sustainable income @ 4% SWR	£7,566/yr

Why this scenario is different

Compared to the closest peer profile — IT contractor at £250,000 — 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

Are charity donations modelled?

No, not directly. Gift Aid donations reduce adjusted net income (extending the basic-rate band) and are a legitimate way to reclaim the £100k taper marginal. The BracketMath engine does not model them automatically; subtract the gift-aided amount from the "other income" field if you want a closer match.

Should I take the £12,570 standard director salary?

For this row the optimiser disagrees with the £12,570 rule of thumb — it places the optimum salary at £5,000. Above £5,000 the marginal cost (employer NI + employee NI + income tax) exceeds the marginal saving in corporation tax + dividend tax.

What happens if I retain profit in the company instead of extracting it?

The optimiser models full extraction (max-extraction mode). Retaining profits inside the company defers the dividend-tax slice but pays corporation tax now. If the retained cash is invested at company-level the returns face corporation tax annually. If the company is later sold and qualifies for Business Asset Disposal Relief, retained profits can be extracted at 10% CGT — but BADR rules and the lifetime allowance keep tightening (currently £1m lifetime cap). For most contractors, extract now is the right call.

Are dividend tax rates rising in 2026/27?

No — the 8.75% / 33.75% / 39.35% rates were set in 2022 and have been held flat through 2026/27. The Dividend Allowance has been reduced from £2,000 (2022/23) to £500 (2024/25 onwards) which has the same effect as a ~£175 tax rise at any rate band. This figure is built into every dividend-related calculation on the site.

Is the figure on this page net of accountancy fees?

Yes when relevant — the take-home calculator deducts an umbrella fee for inside-IR35 rows (£1,500/yr assumed) and the optimiser allows for an arbitrary annual business expense pot (£3,500/yr default for Ltd Co rows). Sole-trader rows assume the higher of £800/yr or 5% of turnover as actual business expenses, which approximates a low-overhead service business.

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.