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Increasing Furlough Directors salaries

Access to JRS

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I have a number of clients, as will many others that pay the directors either £8.5k or £12.5k (depending on their eligibility to claim the national insurance allowance) and the remainder as dividend. If these directors have to put themselves on furlough can they increase their pay to £25k per annum to obtain access to the JRS funding?

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JCACE
By jcace
27th Mar 2020 11:31

The 80% will be based on their salary at 28 February for those who are paid a regular salary.

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By LOUISEWALSH
27th Mar 2020 11:36

Thanks jcace

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By John R
27th Mar 2020 11:59

I read it that salaries would be based on the higher of the average for the past twelve months or the salary for the same month last year (all not just irregularly paid employees). Where does it say that it is based on the salary at 28 February?

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By Duggimon
27th Mar 2020 12:38

Just before the bit where you read that it says salaried employees will get their normal salary.

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By Adam12345
27th Mar 2020 11:42

Firstly, consider if this would be a moral thing to do in the circumstances.

Undoubtedly, there will be some anti-avoidance to stop this when final details are released - probably the basis for the 80% refund will be based on historic salary rather than a future salary.

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By Cheshire
27th Mar 2020 12:00

When did ethics go out of the window. I despair.

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By ireallyshouldknowthisbut
27th Mar 2020 14:10

Some people seem to think ethics is just north of London, before you get to Suffolk.

We aint playing ball with anything like that.

I have had to remind several clients this is for business severely impacted by the pandemic.

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boxfile
By spilly
27th Mar 2020 13:18

HMRC have said they may audit claims, so it sounds like they will be looking out for suddenly inflated salaries.

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By Southbankdelboy
27th Mar 2020 15:23

And for those taking small salary and mainly dividends, the salary usually goes up a little from April to the start of the NI primary threshold but as this scheme is a grant based on salary at 28 February I guess that means the grant will remain unchanged even if salary would usually have increased in April were it not for the director being furloughed. Would that be correct?

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By NYB
27th Mar 2020 16:04

Why do disasters bring out the worst in some people. I too have had money grabbing directors. We all appreciate the difficulty but what they are suggesting is verging on fraud.

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By Accounting_91
28th Mar 2020 15:23

.

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By Matrix
28th Mar 2020 13:57

Sorry to say but thousands are in the same position as you. To artificially inflate the pay would, in my view, be unethical.

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By CBald
28th Mar 2020 14:24

Can a director truly meet the conditions to be furloughed ?? My initial thoughts were for those whose businesses were closed by govt - yes, but as I think more about it those directors may still be working. Completing payroll and VAT returns and paying creditors (where possible). I want to be able to furlough my director clients, but I can see the argument that they don't meet the qualification.
Anyone seen any specific advice on this ???

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By Lee11_1989
28th Mar 2020 15:15

Martin Lewis has apparently spoken to the treasury regarding this. Directors, even sole directors, can be furloughed and carry out their legal duties. They can't do any income generating work. As long as they still to this, no action will be taken against them.

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