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Directors with no contracted hours and CJRSv2

How to calculate part-time furlough hours

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Anyone here knows that our directors do not have contracted hours.

So when it comes to p/t furlough calculations, how do we know what the base hours of the calculation are when none of directors record their time in hours?

No obvious guidance is available so far....

Replies (24)

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By SimonStone
01st Jul 2020 17:03

I had to call HMRC about a different CJRS query and raised this point about Directors. The lady told me there was no specific guidance for Directors, and nothing is going to be released.

This isn't a helpful post, but just relaying that HMRC don't seem to know either!

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By Mr_awol
01st Jul 2020 17:36

Thinking of most of my client base that this might apply to I don't think many of them can claim for be 'furloughed'. They just aren't very busy.

I will wait to see what we decide as a firm, but my gut feel is that most close company directors probably shouldn't be entitled to anything - unless they are a nail bar, tattoo studio, etc (in which case they probably aren't operating via a Limited Company anyway).

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By Paul Crowley
01st Jul 2020 17:52

Pure judgement excercise. Make a realistic and justifiable estimate of typical hours worked precovid.

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Replying to Paul Crowley:
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By Mr_awol
01st Jul 2020 21:45

It isn’t about typical hours worked though.

If I run a garage, and normally open 5 1/2 days a week, and operate it via a limited company, then if I shut the doors, don’t answer the phone, and basically ‘do not work’ mon-wed, then I have a part time furlough claim.

If I sit there all week but only get one MOT on Monday, a couple of puncture repairs Tuesday, and a service a day for the remaining days then I’m still ‘working’ and am not (and have never been) furloughed.

If I’m a hairdresser and I have a few walk ins but nothing all afternoon then I am not part time furloughed.

If I’m an on call gas engineer and I would have gone out of a call cake in, but it didn’t, then I am not part time furloughed.

In fact, apart from the businesses referred to by our learned friend below, and a few others, I’m not sure I have too many examples of directors being able to furlough themselves now that they are ‘able’ to work.

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Replying to Mr_awol:
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By Gone Sailing
01st Jul 2020 23:26

[quote=Mr_awol]

"If I’m a hairdresser and I have a few walk ins but nothing all afternoon then I am not part time furloughed."

The hairdresser is a good example to work with.

So, if I open in the morning, get it filled with appointments, then close for the afternoon, then I'm part time furloughed.

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Replying to Gone Sailing:
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By Mr_awol
02nd Jul 2020 00:16

Gone Sailing] <p>[quote=Mr_awol wrote:

"If I’m a hairdresser and I have a few walk ins but nothing all afternoon then I am not part time furloughed."

The hairdresser is a good example to work with.

So, if I open in the morning, get it filled with appointments, then close for the afternoon, then I'm part time furloughed.

You are - as long as you decide to close for the afternoon and don’t just happen to be quiet.

If you advertise your reopening hours as mornings only, and turn down an afternoon appt - or get the customer to rebook for the following morning, etc, then that’s the very best example of genuine furlough. In reality that isn’t likely to happen.

If you stay in the salon ‘to do book work’ and are still there to answer the phone, etc then no. I’d say not furloughed.

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By PandoraSleeps
01st Jul 2020 18:26

I guess in the absence of anything forthcoming from Hmrc we set everything out for the client and make them take responsibility for if / how they want to calculate a claim.

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Replying to PandoraSleeps:
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By Mr_awol
01st Jul 2020 21:36

PandoraSleeps wrote:

I guess in the absence of anything forthcoming from Hmrc we set everything out for the client and make them take responsibility for if / how they want to calculate a claim.

Until they want you to process their calculation - then you are assisting their (potential) fraud.

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By NYB
01st Jul 2020 19:08

Find out exactly the director’s situation - what are they doing or not doing. I’ve questioned mine and they have all decided to come off Furlough as they are running Business and trying to gain business. The only two I have staying on are a) one who puts up venues such as Glastonbury etc. By contract. He has no business. And b) once who:contracts metal repairs to cruise ships. No work there.

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Replying to NYB:
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By Mr_awol
01st Jul 2020 21:39

NYB wrote:

Find out exactly the director’s situation - what are they doing or not doing. I’ve questioned mine and they have all decided to come off Furlough as they are running Business and trying to gain business. The only two I have staying on are a) one who puts up venues such as Glastonbury etc. By contract. He has no business. And b) once who:contracts metal repairs to cruise ships. No work there.

Exactly. Yes there will be some bent accountants willing to claim that mr director is ‘part time furlough’ just because he normally does fifteen jobs a week and he only had six this week - but neither you nor I will be amongst them

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By Gone Sailing
01st Jul 2020 23:27

Thanks for raising the issue, there are quite a few sectors on part time.
The lower the denominator, the higher the claim.

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By sallyrichardson
02nd Jul 2020 09:30

Thank you again everyone here - it's so nice to know that I have drawn the same conclusions, when there is lack of guidance, as everyone else. It's very reassuring.
I will be telling most directors they can't do it. I have some other clients that are staying on fully for obvious reasons (youth club, swim school). After I explained that staff were still accruing holiday, that the employer would have to honour, most came off of the scheme in May...!

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Replying to sallyrichardson:
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By gillybean04
02nd Jul 2020 12:32

sallyrichardson wrote:

Thank you again everyone here - it's so nice to know that I have drawn the same conclusions, when there is lack of guidance, as everyone else. It's very reassuring.
I will be telling most directors they can't do it. I have some other clients that are staying on fully for obvious reasons (youth club, swim school). After I explained that staff were still accruing holiday, that the employer would have to honour, most came off of the scheme in May...!

Came off the scheme and went back to work? Or were laid off?

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Replying to gillybean04:
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By sallyrichardson
03rd Jul 2020 11:23

Went back to work as work was picking up... haven't had any of our clients have to lay anyone off yet, but I think it's early days yet...!

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By Paul Crowley
02nd Jul 2020 11:11

Do any responders watch Aweb live items? Directors come up regularly.

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Replying to Paul Crowley:
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By Gone Sailing
02nd Jul 2020 11:32

Let's say we don't, tell us more ......

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Replying to Paul Crowley:
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By memyself-eye
02nd Jul 2020 16:07

Ahh, a topic for the pub (remember those?) on Saturday -"Do you watch AWEB live?"

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By djn24
06th Jul 2020 10:13

So let me get this right, you have (e.g) a Ltd company director who does construction work for the general public. Due to covid 19, can only work for say 2 days per week whereas usually they work 5. You are saying that there can be no pro rate claim? I find that a little strange when they could part furlough their staff from 1st July.

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Replying to djn24:
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By Paul Crowley
06th Jul 2020 10:41

In that circumstance part furlough is reasonable and defendable in my opinion.
But I appear to be on my own as regards other responders

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Replying to djn24:
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By Gone Sailing
06th Jul 2020 10:42

The general feeling is that it's about how the week pans out.
If they are in 'working mode' and the 2 days' work is spread in 'irregularly' over the week, then they are not furloughed.
If they work 2 days, and spend the rest of the week watching tele, then they are part furloughed, I suggest.

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By petestar1969
06th Jul 2020 10:38

I have one of my director clients on furlough, sole director/shareholder.

His company works on fixed term contracts, his last one ran out in early March. He was negotiating a new one to start in early April but that got canned due to coronavirus.

He has been on furlough since April as he hasn't worked since.

He has been looking for new contracts and going for "interviews" but so far nothing has been forthcoming. I'm happy he can still be furloughed as looking for new work is covered by his director's duty of "promoting the company".

As soon as he gets a new contract we will take him off furlough.

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Replying to petestar1969:
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By Gone Sailing
06th Jul 2020 10:44

I think many of us would like to see that one tested, ie. versus marketing.

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By pauljohnston
06th Jul 2020 11:22

Thank you for raising this. I dont agree with PeteStar. In my view he in the sales process so therefore can not be furloughed.

If the Guy looked for new work only on Monday then I think this could be a part-time furlough.

The education sector is an area that part time furlough may work. Not teachers but ancillary services too - eg assessments for extra support to those with say ADND.

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By Brian Gooch
06th Jul 2020 13:03

Isn't the thing about 'normal' hours for the scheme that they should be stated in an employment contract. Since many OMB directors don't have employment contracts they won't have any stated normal hours and therefore there is no basis for a part-time furlough claim? Maybe not 'fair', but less open to abuse than a 'whatever you feel' number that can't be defined/determined subjectively.

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