IR35 Deemed Employer Cost Check 2026/27 by ReadyStack

What an inside-IR35 contractor really costs the fee-payer once employer NI, the Apprenticeship Levy and the April 2024 set-off gap are priced.


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• Deemed direct payment, built HMRC's way — Strips VAT and the direct cost of materials off the invoiced fee before anything is taxed, so the PAYE base you report is the one Chapter 10 ITEPA 2003 actually defines.
• Employer NI and Levy shown on top, never inside — Applies 15% secondary Class 1 above the GBP 96 weekly secondary threshold and 0.5% Apprenticeship Levy as a cost the deemed employer carries. Neither may be deducted from the contractor's agreed rate.
• Employment Allowance shown as GBP 0, with the reason — The GBP 10,500 Employment Allowance cannot be set against payments to deemed employees. Spreadsheets and chatbots apply it anyway and understate the cost of every inside-IR35 seat.
• The April 2024 set-off gap priced in pounds — The off-payroll set-off returns income tax and employee NICs already paid by the PSC. Employer NICs and the Apprenticeship Levy are outside it and stay with the deemed employer for every year HMRC can assess.
• The s.61T 45-day answer date — Enter the day the worker's representations landed and get the last lawful day to confirm or replace the Status Determination Statement. Miss it and the client itself is treated as the deemed employer.
• CSV liability schedule (paid layer) — Exports the full deemed payment schedule and the set-off gap as a .csv you own, so it can go into a payroll run, a board paper or an HMRC enquiry file instead of being retyped.

| You type | |
|---|---|
| Contractor day rate invoiced | default 500 |
| Days engaged per year | default 220 |
| Invoiced amount includes 20% VAT | default False |
| Direct cost of materials (deductible) | default 0 |
| Annual pay bill over GBP 3m (Apprenticeship Levy applies) | default True |
| Where this engagement stands | default Outside IR35 - determination disputed or under HMRC enquiry |
| Years HMRC can assess | default 4 |
| Date the worker's representations were received | default 2026-09-01 |

| It answers | |
|---|---|
| Deemed direct payment (PAYE base) | GBP |
| Employer NI at 15% - your cost, on top | GBP |
| Apprenticeship Levy at 0.5% | GBP |
| Employment Allowance relief available | GBP |
| Cost on top of the agreed rate, per year | GBP |
| True cost per day | GBP |
| Outside the set-off if status is overturned | GBP |
| s.61T deadline to answer the dispute | |

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