Director-Owners (Our comments as of 27/03/2020, 13:44. For now, this information is not to be relied on)
Updated 07/04/2020, to include confirmation of director's position RE CJRS
Manager-owner Coronavirus Job Retention Scheme
The government has announce that company directors are eligible for the CJRS.
As office holders, salaried company directors are eligible to be furloughed and receive support through this scheme. Company directors owe duties to their company which are set out in the Companies Act 2006. Where a company (acting through its board of directors) considers that it is in compliance with the statutory duties of one or more of its individual salaried directors, the board can decide that such directors should be furloughed. Where one or more individual directors’ furlough is so decided by the board, this should be formally adopted as a decision of the company, noted in the company records and communicated in writing to the director(s) concerned.
Where furloughed directors need to carry out particular duties to fulfil the statutory obligations they owe to their company, they may do so provided they do no more than would reasonably be judged necessary for that purpose, for instance, they should not do work of a kind they would carry out in normal circumstances to generate commercial revenue or provides services to or on behalf of their company.
This also applies to salaried individuals who are directors of their own personal service company (PSC).
Cairns
comments:
It appears that the government is taking a commercial viewpoint on manager-owners, in that the PAYE salary can be funded through the job retention scheme like normal employees, if no work is carried out at all. But dividends cannot form part of the director's remuneration and therefore not included in earnings based relief. It is a tricky one for the government as if they start to include dividends for manager-owners, then technically they would have to consider all dividends, including those of investors of public corporations. We
are under the impression that sole directors cannot furlough themselves, if there is any work being done. However, if the company
completely comes to a stop, then as an employee director, the sole director
could perhaps be furloughed and therefore 80% claimed. – to be confirmed SSP
can be claimed as like an employee, with the first two weeks being reclaimable. A possible choice that may have to be taken is lay off the director, and then they claim relief through universal credit. Although we imagine there may be hoops to jump through to prove your income. Director's with low PAYE salary should consider either furloughing themselves (if eligible) or applying for universal credit. If applying for universal credit, please advise your payroll provider to stop processing you payroll. Other help you can get Although the below is provided for the self-employed, it still applies to director's with reduced earnings. The government is also providing the following additional help:
If you’re a director of your own company and paid through PAYE you may be able to get support using the Job Retention Scheme .