Salary vs Dividends 2026/27: The Optimal Split for UK Contractors
The most common question every contractor asks. Here's the full calculation — exactly how much to pay yourself in salary, and when to switch to dividends.
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Contractor tax, explained clearly
Plain-English guides to the topics every UK limited company contractor needs to understand — written by an ICAEW chartered accountant. No jargon, no upselling.
Quick reference: 2026/27 Tax Rates · Key Tax Dates · Making Tax Digital · Jargon Buster
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IR35 Explained: Chapter 8 vs Chapter 10 — What Every Contractor Must Know
IR35 is not one law, it's two. Understanding which chapter applies to your contract could mean the difference between thousands of pounds inside or outside.
Read guideShould You Register for VAT as a Contractor? FRS vs Standard Rate Explained
VAT registration isn't just about the threshold. For many contractors, voluntary registration and the right VAT scheme saves thousands each year. Here's how to decide.
Read guideDirector's Loan Accounts Explained: S455, BIK, and How to Avoid Them
What happens if your director's loan account is overdrawn at year-end, the S455 tax charge, and practical strategies to clear a loan before it becomes a problem.
Read guideHow to Close Your Limited Company Tax-Efficiently
Members Voluntary Liquidation vs striking off, Business Asset Disposal Relief, and how to plan a tax-efficient exit when winding down your contracting company.
Read guidePayments on Account Explained: Why Your January Tax Bill Is Bigger Than Expected
Why your first self-assessment bill includes an extra 50% "payment on account" — and how to plan your savings so it never catches you off guard.
Read guideContractor Expenses: What You Can and Can't Claim (2026/27)
The two tests that decide whether a cost is allowable, the 24-month travel rule, use of home, pensions, and the expenses HMRC will reliably disallow.
Read guide2026/27 Tax Rates for Contractors
Income tax, National Insurance, dividend and corporation tax, VAT thresholds, CGT and the pension annual allowance — the key 2026/27 figures in one place.
View ratesMaking Tax Digital: What Contractors Need to Know
MTD for VAT, MTD for Income Tax from April 2026, who it actually affects, and why company-only contractors are affected less than the headlines suggest.
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