- April 7, 2020
- Posted by: STERLING FINANCE
- Category: Business Plan, Company Director, General, Gov. Schemes
We have now received further explanation from HM Revenue & Customs regarding the 80% Job Retention Scheme eligibility.
This is the most detailed clarification to date. Though it’s far from Yes or No, this is the best we could expect in the current circumstances.
Who is eligible?
- director of a company
- already on payroll with a registered PAYE scheme
- receiving salary on or before 28 February
- As office holders, salaried company directors are eligible to be furloughed and receive support through this scheme
- 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 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).
If you are the only director of your company, you can “furlough” yourself and claim 80% salary provided you do not carry-out duties of trading in normal circumstances.
- Prepare a brief board resolution to record the company decision.
- Ensure that you date and sign on the day you take the decision (normally a day before starting date of “furlough”)
- Inform your accountant the necessary details.
It is the responsibility of each director to ensure that proper procedure is carried out and documented very well because HMRC may ask you to justify your decision.
What can be done during Furlough period?
Fulfil your legal duty to manage the company’s affairs except actual trading activity
No work for any other employers
Government will retain the right to retrospectively audit all aspects of the scheme with scope to claw back fraudulent or erroneous claims.
Please follow this link for further details
We can help
Sterling Finance is open for business to support businesses during this tough time. Our experienced and knowledgeable team is ready to help you. Here is our contact details
Sterling Finance UK Limited
Tel 0161 339 4989