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CJRS regs - are directors 'fixed rate employees'?

CJRS regs - are directors 'fixed rate employees'?

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In a typical small company, especially director only companies, it is rare for directors to have contracts of employment and be on a formal salary.   7.6 of the CJRS regs talk in terms of the person being 'entitled under their contract'.  Clearly your typical contractor company for example, the director will get paid the usual £8K p.a. whether on annual or monthly basis and anything else as and when they please, as the accountant advises.  It seems to me that such directors are therefore not strictly 'fixed rate employees' (even if the £8K annual salary is predictable and regular) as they are not 'entitled under their contract' in which case their reference salary is calculated as per 7.2.  

Is this a reasonable interpretation?

Replies (7)

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By paul.benny
16th Apr 2020 11:54

Unusually, the (initial) guidance was published before the legislation.

Section 7 reads to me like putting into legislative language the relatively clear basis in the guidance.

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By Wilson Philips
16th Apr 2020 12:05

As suggested elsewhere, the lack of a contract may prove to be problematic for many.

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By ireallyshouldknowthisbut
16th Apr 2020 13:04

I initially read 'fixed rate employee, 7.6' as LLP members but on closer inspection the list under 7.6 is not clear if this is a list of "ands" as I thought it was, or its a list of "any ofs".

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Replying to ireallyshouldknowthisbut:
By jon_griffey
16th Apr 2020 13:52

7.6 relates to 'employee' or treated as an employee (LLP).

I read the whole of 7.6 as 'ands'. There is an 'and' at the end of 7.6(e). All these 'ands' added together I think make it difficult for directors without a contract to be a fixed rate employee.

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Replying to jon_griffey:
By ireallyshouldknowthisbut
16th Apr 2020 14:11

quite right there is an "or" in 7.6(a) I was getting very tired yesterday when going through it.

Re-reading today, the other problem for directors with no contract is 7.5 (d). by definition the director's ' "payable at the discretion of the employer" as there is usually no contract or legal right to it.

I predict a lot of contracts for director's duties suddenly coming into existence that no-one knew existed before now.

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By Luke
16th Apr 2020 16:18

Answering the original question, I would also read it that a director is not a fixed rate employee, so reference salary is calculated as per 7.2.

On the contract point though, again talking about those who like most are paid £719 or £1,041 per month, section 7.4(d) refers to "arises from a legally enforceable agreement, understanding, scheme, transaction or
series of transactions". Surely even while there may not be a written contract, it is both an understanding and a series of transactions, which would mean the basic salary is eligible. (Of course a person can be an employee for PAYE purposes but not for employment law purposes, which I would submit is the case here.)

7.5(d) refers to discretion of the employer so would rule out bonuses but I don't think rules out the standard monthly pay.

I confess to not having studied the whole document so may be missing a trick here??

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By kevinringer
18th Apr 2020 10:21

I want to make you aware that 3 documents were published on GOV.UK 17/04/20 evening which may help you.

1. New guide with worked examples at This addresses holiday pay including bank holidays.
2. New step-by-step guide at
3. The employers guide has been updated (this is version 5) at

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