Daniel Barnett - Employment law barrister has been talking to Nick Farrari on LBC this morning, and has confirmed One Man Band Ltd Company Directors ARE entitled to claim 80% of their salary, however dividends will NOT be included in calculating the amount they will pay.
This means that a director who has chosen to take only £8632 per year as a salary WILL be entitled to claim 80% of 1/12 of this.
Those who take a higher salary will be capped at 2.5k to bring it inline with PAYE.
He also said, that those directors who ONLY take dividends as a wage, will more than likely fall under the Self Employed rules and as such will need to wait for goverment to annouce whether they will be planning any releif for the 5 million self employed in this country.
This does create an interesting question, if the government do decide to help the self employed, you might find a situation where directors who have paid themselves a higher rate of dividends could decide to claim via the S/A route, instead of the salary route, in order to increase the amount the government will pay.
However, you will need to bare in mind, that directors MUST follow the same rules as employees who have been furloughed, and this means, that they will NOT be able to do ANY work for their company during the period in which a claim is made.
So directors will only be allowed to claim, if they really do have to close their business down, simply being unable to afford to pay a wage whilst continuing to operate as a functioning director will not be acceptable to claim the relief.