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JOB RETENTION SCHEME: DIRECTORS

Directors suddenly wanting large amounts through payroll

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Is any one else receiving requests from  director clients suddenly wanting large amounts of money put through the payroll thinking they can get 80% back?

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By SteLacca
26th Mar 2020 14:52

Only one up to now, and not for the director, but for his wife (who is on payroll at a proper wage) looking to pay a large bonus. (though not enough to hit the £2,500 limit)

I spoke to him this morning and made it very clear that, if employee retention is claim, HMRC could challenge an artificially high payment.

I'd be surprised if we don't see something similar to GAAR, or even a TAAR brought in with the legislation.

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RLI
By lionofludesch
26th Mar 2020 15:00

No.

Nothing of that nature has been suggested here.

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Lone Wolf
By Lone_Wolf
26th Mar 2020 15:11

Yes, we have had it suggested that the February payroll be amended to inflate any claim, and I have advised strongly against this.

Frankly, I expect the guidance to include strict criteria for this, with it being based on February payrolls, and any amendments that have taken place since the chancellor's announcement being disregarded.

For director's at any rate, I believe they can't be furloughed any way and so it won't achieve their aims.

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Replying to Lone_Wolf:
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By Jdopus
26th Mar 2020 17:21

Is there a source for the claim that directors can't furloughed? It seems to me if a company has completely ceased trading that they could be furloughed

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Replying to Jdopus:
RLI
By lionofludesch
26th Mar 2020 17:37

Jdopus wrote:

Is there a source for the claim that directors can't furloughed? It seems to me if a company has completely ceased trading that they could be furloughed

The theory goes that at least one director must be running the company.

I'm not convinced that there's a lot to run. It'd be harsh to deny support to a director just because he transferred his wage from the company account to his own - denied support for the sake of a minute a month ?

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Replying to Jdopus:
Lone Wolf
By Lone_Wolf
26th Mar 2020 17:39

No source as such, which is why the advice I'm giving is wait and see.

However, a director is an officer, rather than a normal employee. It's a statutory position, with duties beyond merely operating the company's trade. The remuneration these people get is for that position, hence why they don't need to adhere to NMW rules and can go for a low salary. This position can't be ceased, other than by resigning (in my opinion I should add).

It might be different for those directors who have an employment contract with their company, and are paid in line with NMW rules. Who knows at this stage.

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By Steve Holloway
26th Mar 2020 15:12

They know they will be lookin for a new accountant if they did!

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By kestrepo
26th Mar 2020 16:36

It is looking like the scheme may work as you describe however until the official guidance is issued nobody knows how it will actually work! I have however heard that Directors will be excluded from the scheme.............. that might put some powerful fire in your clients belly though so you might want to hold of telling them for now until the guidance is issued!!!

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