You are confusing a number of strands that although related, are determined by different rules.
If you are in the private sector, inside IR 35, then there is a requirement for whichever entity is handling the payroll (umbrella or your own limited) to deduct the full amount of tax, em'ee and em'er NIC and pay this over to HMRC.
If this is your limited, then strictly (in law) it's not PAYE although it is calculated that way.
You then need to look at your contract.
Your end client may have decided to pay you say £400 a day, all in. That is their budget and is what they are prepared to pay. From that the umbrella will deduct the tax and NIC and their fees. You are left with the net.
You may have negotiated a position whereby the end client is paying £400/day plus Em'er NIC.
That is presently not an industry standard contract, but I suspect will become so soon.
If so, then the end client may pay you say £350/day and pay the em'er NIC either directly to HMRC or to the umbrella to manage for them.
This industry has for a long time (a generation or more) looked at the gross day rate and worked back.
I suggest that has to change and instead you need to think about what you would like net of tax and all NIC and then calculate what the gross rate should be.
The end client may find the answer acceptable or not. If not, you are in a commercial negotiation around how much the end client wants you and how much you want the job.
If you are in the private sector, inside IR 35, then there is a requirement for whichever entity is handling the payroll (umbrella or your own limited) to deduct the full amount of tax, em'ee and em'er NIC and pay this over to HMRC.
If this is your limited, then strictly (in law) it's not PAYE although it is calculated that way.
You then need to look at your contract.
Your end client may have decided to pay you say £400 a day, all in. That is their budget and is what they are prepared to pay. From that the umbrella will deduct the tax and NIC and their fees. You are left with the net.
You may have negotiated a position whereby the end client is paying £400/day plus Em'er NIC.
That is presently not an industry standard contract, but I suspect will become so soon.
If so, then the end client may pay you say £350/day and pay the em'er NIC either directly to HMRC or to the umbrella to manage for them.
This industry has for a long time (a generation or more) looked at the gross day rate and worked back.
I suggest that has to change and instead you need to think about what you would like net of tax and all NIC and then calculate what the gross rate should be.
The end client may find the answer acceptable or not. If not, you are in a commercial negotiation around how much the end client wants you and how much you want the job.
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