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Furloughing Directors - a checklist ?!

Furloughing Directors - a checklist ?!

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Like many of us this the area driving me nuts through lack of precise guidance from the government. I'm trying to get it clear in my mind what might be deemed reasonable condsiderations for furloughing a Director (in the absence of clear guidance)

2 Directors (say 2 spouses). If one Director can do all the work then probably reasonable to furlough the other Director

Sole Director (or remaining Director if 2). 

Acceptable activities possibly allowed if this last Director is furloughed

Filing Accounts

Bookkeeping

VAT and PAYE and CT returns

Banking money received from customers

Paying suppliers (pre furlough invoices)

Opening the post

Replying to emails 

Unacceptable activities that would preclude furlough

Invoicing customers

Marketing of any kind (including social media)

Receiving stock from suppliers

Travel

Of course whatever is decided the Directors will need to approve the furlough via a Borad Meeting and documented in Company records

If colleagues could agree or disagree with the above list or add their thoughts or interpretations to it that would be very helpful. Clearly adopting a reasonable approach is all we can try to do.

For March I have run Director payrolls as normal and told clients we will need to wait and see if the government provide further clarification before claims can be made for April in late April

 

Replies (10)

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By markmorley
08th Apr 2020 10:41

Some new clarifying guidence updated for officers and directors . I think particularly as a PSC if you've done the work the director could bill to try and get paid for work done and if there's no-one else receive stock but not business generation. In principle furloughing is laying off so only critical mimimal corporate duties might qualify as an officer. If you weren't paid as an officer but an employee (the duties of which are now furloughed) did you have an employment contract justifying the employed salary and did you comply with or commonly niot to avoid Auto enrollment ? Begins to put spotlight on what directors salaries ar for.

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RLI
By lionofludesch
08th Apr 2020 10:46

"Filing Accounts

Bookkeeping

VAT and PAYE and CT returns

Banking money received from customers

Paying suppliers (pre furlough invoices)

Opening the post

Replying to emails

Invoicing customers

Marketing of any kind (including social media)

Receiving stock from suppliers

Travel"

All those are OK except the marketing one.

Travel ? Maybe. Depends why you're travelling.

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By ireallyshouldknowthisbut
08th Apr 2020 11:28

Thing is its a big "dunno"

I went in the other direction and in my guidance and said stat duties, record keeping and not much else unless it was a "trivial" activity. Eg if a customer phones up to say they are back up an running in 2 weeks, that seems OK, but if you then spend a day planning for it, then you are clearly "working"

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Replying to ireallyshouldknowthisbut:
RLI
By lionofludesch
08th Apr 2020 12:18

ireallyshouldknowthisbut wrote:
if a customer phones up to say they are back up an running in 2 weeks, that seems OK, but if you then spend a day planning for it, then you are clearly "working"

Agree.

By the way, who's policing this ?

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By soundadvice
08th Apr 2020 11:57

Thanks Lion.
Not sure about the raising of sales invoices.
I suppose if the invoice relates to work done pre furlough its okay but if its work done post furlough clearly not.
I've got a client (an old mucic promoter) who receives monthly royalties from music contracts set up years ago; he receives the royalties but has to invoice PPL and PRS when he gets their statements. He does no work now except producing the invoices and doing a spreadsheet for me for his VAT return.
He is doing nothing to generate income just doing the paperwork to account for it.
Not sure if these basic activities would preclude furlough (but then no-one is sure)

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Replying to soundadvice:
RLI
By lionofludesch
08th Apr 2020 12:20

soundadvice wrote:

Thanks Lion.
Not sure about the raising of sales invoices.
I suppose if the invoice relates to work done pre furlough its okay but if its work done post furlough clearly not.

If you do work whilst on furlough, billing it is fine.

Because you weren't on furlough after all !!

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By Duggimon
08th Apr 2020 12:17

If you're not doing the work and you're not seeking new work and you're not actively preparing to make the new work easier to do when you finally are able to do it then I'd say you're fine.

Just an opinion because it's all we have to go on, but I wouldn't lose sleep over putting in a furlough claim for a director who I knew had sent out some invoices for work done in February. Particularly if they're strapped for cash and have staff to pay.

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Giraffe
By Luke
08th Apr 2020 12:36

I think your checklist seems reasonable.

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By valakot
22nd Apr 2020 01:52

In regards to a sole director, what do you think, is running a Payroll, paying salary to yourself and claiming CJRS grant every pay period (since it is also a work to generate income, CJRS is income in tax perspective) is allowed while being furloughed?
This is what I need to do as a sole director.

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Replying to valakot:
RLI
By lionofludesch
22nd Apr 2020 10:08

valakot wrote:

In regards to a sole director, what do you think, is running a Payroll, paying salary to yourself and claiming CJRS grant every pay period (since it is also a work to generate income, CJRS is income in tax perspective) is allowed while being furloughed?
This is what I need to do as a sole director.

You think that claiming the grant disqualifies you from claiming the grant ?

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