‘Inside IR35’ means that you are considered, for tax purposes, an employee of your end client and therefore subject to PAYE. If you are operating ‘inside IR35’, you simply need to ensure you are paying the appropriate taxes, which usually involves a ‘deemed payment’ of income tax being made at the end of the tax year.

‘Outside IR35’ means that you are operating as a genuine business, and therefore operating outside of the IR35 rules. If you are operating ‘outside IR35’, you are able to pay yourself a Salary, draw the remainder of income as Dividends, and remain responsible for your taxes as usual.