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Director of my own company - do I qualify for the 80 per cent salary?

(305 Posts)
cucumber66 Fri 20-Mar-20 21:13:10

I’m a director of my own limited company and ordinarily earn about 28k per annum. However, since the virus hit business has dried up and I’m facing serious financial difficulties.

From what I gather, I’m also classed as an employee of my company and am paid my monthly salary through the payroll. There are no other directors or employees - it’s just me.

I can’t get hold of my accountant tonight to check whether I’m eligible for the 80% government grant and am feeling anxious as to whether I can claim this. It could be the difference between my business surviving or going under. Does anyone know?

DentalPatient Fri 20-Mar-20 21:16:49

Interested, on the face of it I would say yes but will need to read the small print when it comes out.

OvaHere Fri 20-Mar-20 21:18:05

We are in the same position. Ltd company but myself and DH are the only employees.

I'm not 100% certain but I believe any company that uses PAYE is eligible.

cucumber66 Fri 20-Mar-20 21:32:56

I'm not 100% certain but I believe any company that uses PAYE is eligible.

I’m praying that’s the case...

TodaysFishIsTroutALaCreme Fri 20-Mar-20 21:37:22

Do you take the 28k as a salary or just a minimum to keep under the PAYE threshold and then the rest in dividends? If it will cover 80% i bet it wont include dividends and that will be problematic for a lot of directors

cucumber66 Fri 20-Mar-20 22:02:20

Do you take the 28k as a salary or just a minimum to keep under the PAYE threshold and then the rest in dividends? If it will cover 80% i bet it wont include dividends and that will be problematic for a lot of directors

@TodaysFishIsTroutALaCreme No idea - I just take monthly salary and my accountant sorts out the rest. I’m fairly certain some of it is dividends though as I remember him talking about it. What’s the PAYE threshold?

TodaysFishIsTroutALaCreme Fri 20-Mar-20 22:44:43

A lot of directors take a wage under £12500 (changes every year) to avoid having to deduct PAYE. I would imagine your accountant gives you that as a wage and then the rest as dividends. Do you have to pay tax on the 31st January? That I'd a good indication if you are taking dividends.

TyrionsNextWife Fri 20-Mar-20 22:47:47

Who does your payroll each month? You should be getting a payslip every month which will show your gross salary as an employee without dividends.

BBCONEANDTWO Fri 20-Mar-20 22:49:19

Is someone who is self employed considered a 'director'. that would be interesting to know.

Northernsoullover Fri 20-Mar-20 22:49:35

I am in the same situation.

KellyHall Fri 20-Mar-20 22:55:00

Being self-employed is not the same as being a director. You can only be a director of a limited company and anyone can be a director of that company, without even working for the company. Limited companies are registered with companies house and submit accounts to them each year. Being self-employed is just that, you could just do work with no-one else's input at all and declare all of your income via your self-assessment tax return each year.

Smidge001 Fri 20-Mar-20 23:05:37

I read you have to have made some employees redundant already, and then qualify for the 80% if you rehire them. So it wouldn't work for single employee companies.

Smidge001 Fri 20-Mar-20 23:08:09

This is what I read on the BBC news site "It is understood that the wage subsidy will apply to firms where bosses have already had to lay off workers due to the coronavirus, as long as they are brought back into the workforce and instead granted a leave of absence."

mollypuss1 Fri 20-Mar-20 23:55:22

I work in events/festivals. I obviously now have absolutely no work and potentially none for the rest of the year depending on how long this lasts. I am a director of my own limited company and I therefore am technically an employee of my own business. I pay personal tax, corporation tax, NI and VAT every quarter/year as applicable. I have no idea if I qualify and suspect I don’t. Hope I’m wrong or I’m pretty fucked to be honest.

cucumber66 Sat 21-Mar-20 07:58:34

I read you have to have made some employees redundant already, and then qualify for the 80% if you rehire them. So it wouldn't work for single employee companies.

But if I’m unable to get this help I will have to make myself redundant in effect, because my company will cease to exist. Also it seems very unfair to only help businesses who’ve already laid people off - that wasn’t my understanding at all from watching the news. If that was correct, then what about all those small companies who’ve been desperately trying to keep staff on - their staff now get nothing but employers who’ve already made redundancies can get 80% of their staff’s wages paid if they rehire them? I think the BBC has got that bit wrong.

I am a director of my own limited company and I therefore am technically an employee of my own business. I pay personal tax, corporation tax, NI and VAT every quarter/year as applicable. I have no idea if I qualify and suspect I don’t. Hope I’m wrong or I’m pretty fucked to be honest.

@mollypuss1 so as company directors we do technically count as employees then? I’m getting really anxious about this as I won’t be able to speak to my accountant until Monday and can’t find any clarity online.

@TodaysFishIsTroutALaCreme so if that were the case I’d qualify for 80% of £12500 over three months? Even though it wouldn’t be my full salary (assuming the rest is paid in dividends) that would be a huge, huge help.

adiposegirl2 Sat 21-Mar-20 08:23:16

Just all call your accountants of better yet the HMRC first thing Monday on if you qualify.grin

cucumber66 Sat 21-Mar-20 09:29:29

Just all call your accountants of better yet the HMRC first thing Monday on if you qualify.

Well of course I’ll be doing that - but was hoping for some quicker advice from any accounting experts on MN so I didn’t have to spend the whole weekend stressing.

flowery Sat 21-Mar-20 09:40:27

”It is understood that the wage subsidy will apply to firms where bosses have already had to lay off workers due to the coronavirus, as long as they are brought back into the workforce and instead granted a leave of absence."

Nothing wrong with that. No idea why people are choosing to insert the word “only” between “will” and “apply”.

No reason at all to think it won’t apply to employees who also happen to own the company, as long as they don’t do any work. The company as an entity can put directors who are employees on “furlough” which is the word the government seem to have chosen, and as long as they aren’t working, the company can claim the 80%

cucumber66 Sat 21-Mar-20 09:52:03

Thanks @flowery - I think that in my panic I misread. Hope you are right.

flowery Sat 21-Mar-20 11:08:30

I think the bigger concern is genuinely self-employed people, as in sole traders. At the moment there’s nothing on that level for them. But hopefully we’ll see that coming soon.

Hoppinggreen Sat 21-Mar-20 11:11:14

I think that if you own over a certain percentage of the company you are counted as SE

cucumber66 Sat 21-Mar-20 11:17:27

I think that if you own over a certain percentage of the company you are counted as SE

I’ve never heard that before!

Handsthatdodishesfeel Sat 21-Mar-20 11:25:27

The key is how much you earn through PAYE. Who does your pay run and who provides pay slips? If, as others have said, you are being paid at the threshold you will receive around £739 a month, regularly under HMRC regs (so on the same day each month) Whoever is doing your pay run should be providing payslips (or you should be generating them yourself). If you pay personal tax in January and July then you will have received a tax overview from your accountant.

I don't believe you need to have made anyone redundant to qualify for the 'fulough' payments. There is some initial advice on HMRC Website this morning.

Absentwomen Sat 21-Mar-20 11:28:34

That's not correct, @Hoppinggreen. The rules for self employment status are very distinct.

The OP is an employee of a company. Who owns it, is irrelevant.

topcat2014 Sat 21-Mar-20 11:29:32

Self employed means a sole trader or partnership, not a director.

It would not surprise me if directors did not qualify for this, even if on payroll.

Directors do not qualify for the existing 3k per year company ni allowance for example

I don't know if the guidance is published yet.

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