Share this content

Furlough pay for director only companies

Can anyone advise if sole or husband and wife directors only companies can have furlough pay

Didn't find your answer?

Furlough pay and directors - what are the rules please

Replies (17)

Please login or register to join the discussion.

JCACE
By jcace
24th Mar 2020 12:34

We're still waiting for the details of the scheme to be published

Thanks (1)
avatar
By marky74
24th Mar 2020 14:52

I saw on TV the chancellor said "it applies to everyone in the PAYE system".
Whether this extends to directors on minimum salary remains to be seen - Im waiting until the 11th hour until I process my March payrolls!!

Thanks (0)
avatar
By kate_1834
25th Mar 2020 10:53

This is a question many are asking at the moment. It still seems to be unclear. I read on gov.uk this morning that the 80% furloughed worker provision applies within current employment law limits.

So far, I haven't been able to find anything that clarifies the position for company directors who are on PAYE and whose revenue has dried up because of coronavirus.

Is there anyone on here who can provide clarity on this?

Thanks (0)
avatar
By DaveSmith81
25th Mar 2020 11:31

Hi
I am a director of a ltd company that sells on ebay, at the moment we are closed due to showing symptoms of the virus. sales have obviously taken a dip and for the first time in the companies history last month I barely covered our wages. I am a director of the company and my wife is a Secretary both of us holding 50% shares, both of us take the salary allowance yearly and obviously our dividends allowance on top, I am not interested in profiteering off this and simply just want to safeguard our company and house etc. I am not bothered about upping wages or claiming back dividends I also do not want to close the company down as I am happy to keep working myself and there will be enough strain on the government as it is, my wife is now also looking after our 2 kids (4 and 5) so can not look after themselves. so not only are sales down but we are operating on 50 % of the usual workforce. Any suggestions as to what route we should take anyone? hope this is the right place for the question, sorry if not I have only just joined. My thoughts were to put my wife on furlough and continue to work myself if possible to save having both of us off, just did not know if I can put a shareholder on furlough. Thank for any help.

Thanks (0)
Replying to DaveSmith81:
My photo
By Matrix
25th Mar 2020 12:01

I don’t see why not. If she is not working then do as you suggest.

Thanks (0)
Replying to Matrix:
avatar
By DaveSmith81
25th Mar 2020 12:23

Thank you for your help, hoping when it is finalised it all makes sense.

Thanks (0)
Replying to DaveSmith81:
avatar
By dawnmayo
27th Mar 2020 13:30

If you are showing signs of Covid-19 and self issolating then you can get SSP from the first day which can be claimed back from HMRC if you are a small employer https://www.gov.uk/government/publications/guidance-to-employers-and-bus...

https://www.gov.uk/government/publications/guidance-to-employers-and-bus...

It also appears that you can put a director on furlough, but they can't do any work for the company whilst on furlough https://www.gov.uk/guidance/claim-for-wage-costs-through-the-coronavirus...

Hope that helps

Thanks (0)
avatar
By crofte
27th Mar 2020 11:46

On the government page yesterday about the grants for the self-employed, towards the bottom of the page, it says something to the effect that directors on PAYE may be eligible under the retention scheme. Obviously if they pay themselves the minimum and dividends, they won't get a lot aas dividends not covered, but better than nothing.

Thanks (0)
avatar
By dawnmayo
27th Mar 2020 13:20

I think they can, but will need to follow the furloughed workers rules and not do ANY work for the company, which may be difficult for sole directors. HMRC press release confirms they will be eligable https://www.gov.uk/government/news/chancellor-gives-support-to-millions-...

https://www.gov.uk/guidance/claim-for-wage-costs-through-the-coronavirus...

Thanks (0)
avatar
By johngolfuk
27th Mar 2020 15:03

I am a director of a business that is currently closed (zero turnover), however I run my own payroll and pay my staff weekly. That is the only business related task that I can do at the moment.

Does that mean that I personally cannot be furloughed?

Thanks (0)
Replying to johngolfuk:
avatar
By richard.snape
27th Mar 2020 16:08

Perhaps you could do the payroll in advance, complete and submit the RTI returns and set up forward dated bank payments for furloughed staff for a period before furloughing yourself.

Thanks (1)
Replying to richard.snape:
avatar
By johngolfuk
27th Mar 2020 16:49

Thanks Richard,

Not a bad idea that, I'll look in to it.

Thanks (0)
Replying to johngolfuk:
avatar
By johngolfuk
27th Mar 2020 18:54

A spanner in the works.....?

According to current info on HMRC's website, "You can only submit one claim at least every 3 weeks" - so that means I have to do work every 3 weeks.

And now they're saying they *expect* the online claim service to be available by the end of April.

Good luck all let's hope we all get through this

Thanks (0)
Replying to johngolfuk:
avatar
By richard.snape
28th Mar 2020 01:23

"You can only submit one claim at least every 3 weeks"

I think that is clumsily worded and means there must be at least 3 weeks between claims, because: "3 weeks, which is the minimum length an employee can be furloughed for."

I would imagine they would prefer to have fewer claims to handle so would welcome a longer period. After all the scheme for self employed people involves the first payment in June for up to three months.

"The Coronavirus Job Retention Scheme is a temporary scheme open to all UK employers for at least three months starting from 1 March 2020."

So perhaps you could set up payroll and post dated payments to end of May for your employees and yourself then furlough the employees till further notice from whenever they stopped work as it can be backdated, then furlough yourself till further notice beginning once you have completed those tasks.

Then wait till further details of the claim process emerge to see how long a period you can claim for in one go and how long you can wait to unfurlough yourself and submit your claim. Unless of course you need to claim sooner for cashflow reasons.

However, as the government announcment here: https://www.gov.uk/government/news/chancellor-gives-support-to-millions-... says:

"Those who pay themselves a salary and dividends through their own company are not covered by the scheme but will be covered for their salary by the Coronavirus Job Retention Scheme if they are operating PAYE schemes."

it may be that they will accept that merely operating payroll for furlough and making a claim does not constitute "providing services or generating revenue." Otherwise the above announcement couldn't really take effect in practice.

Thanks (0)
Replying to richard.snape:
avatar
By johngolfuk
28th Mar 2020 12:02

Thanks again Richard.

I suppose it's all down to interpretation - and I realise the info has been put together quickly so the wording may not be perfect.

The way I read this:

"Those who pay themselves a salary and dividends through their own company are not covered by the scheme but will be covered for their salary by the Coronavirus Job Retention Scheme if they are operating PAYE schemes."

is that you are covered by the CJRS if your job is to manage payroll schemes for other companies - if, for example, you are an accountant.

Let's hope things become a bit clearer over the coming days.

Thanks (0)
Replying to johngolfuk:
My photo
By Matrix
28th Mar 2020 12:36

No, why do you think that? If you are running payrolls then you are working so can’t be furloughed.

There is plenty of info on this, a Director can claim provided only performing statutory duties, which I imagine would be a minority as most are trying to save their business. They mean that the limited company has a payroll scheme.

Thanks (0)
Replying to johngolfuk:
My photo
By Matrix
28th Mar 2020 12:36

.

Thanks (0)
Share this content