As long as you can legally avoid some of the issues surrounding IR35 (taxation rule, not law, specifying who is a contractor and who is an employee) and know the rules about pay vs dividends you can pay significantly less tax.
A lot less even on an umbrella (akin to a w2) you make a lot more that a permanent employee. It always surprised me how poorly paid American contractors are relative to full timers.
One chap on Stack over flow seemed to think a 15% premium was a good deal id be looking for 50 - 100% - I looked at a 6 moth contract for Perl at companies house and at the day rate I would have gone in at £400) I would have been on £100k Gross and around 80K after Tax.
