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

[cucumber66]

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?

Hells
Yup, you'll need to lay off some staff and keep the others working 4 or 5 days a week to benefit

That does seem to be the requirement hellsbells

It’s going to make for some interesting conversations with employees because, if you have say 5 but only need 4, instead of all cutting their hours by 20%, 1 can get 80% of their salary via this scheme and not work at all

When you factor in the costs associated with many people actually getting to work, it’s likely to be a better option for many people

Whilst the other 4 people continue to work full time

The disincentive I suppose is that if they manage without you then they may chose to do so after the government support stops

Surely if the reduction in work is down to the current crisis they would be needed again once it is over.

Not neccesarily dental

The economy and consumer confidence is going to be battered after this

There are some industries that are going to take a long time to recover to previous levels, if they ever make it at all

I'm so confused as to how the 80% applies to us.

We own a restaurant and have not officially laid anyone off yet as we only found out we had to close yesterday at 5 with the announcement! Husband and I are owner/directors but both take a wage via PAYE each month of circa £1500 each (wanted to keep paying tax/NI contributions).

We've been trying a takeaway/delivery service since the advice to not go to restaurants was given, and sent most of the staff home last night when the announcement was made to close (and cancelled what few reservations we had), leaving enough to cover any orders that came in, but so far there hasn't been a big enough take up to cover the wages of those who are still working and it looks like we will have to shut up shop altogether after tomorrow (we have a few pre-orders for Mother's Day takeaways to fulfil first).

So will our staff get the 80%? Will we get it? We are looking at losing our business, our house, our employees not being able to pay their bills. I am beside myself - tears, anxiety through the roof.

My impression was that staff have to have stopped working and have paid PAYE in February. Then they qualify. It will stop employers trying to keep workers coming in to workplaces to find things to do because they are being paid, as well as stop companies laying off or sacking/making workers redundant as their work dries up.

I think the acid test is PAYE because that's what HMRC will use to calculate entitlement. They are publishing how to apply on the HMRC site next week. You will need your account number/employer number etc and it's the employer that applies, not workers.

I'm sure you will @vinosaurus. I think it's meant for exactly that situation.

I know what you mean. Technically we might have enough in our company to pay one more set of wages, but then no more for rent, insurance, outstanding invoices.

So we will definitely be closing down now rather than trying to face the almost impossible task of persuading companies to continue buying a non-essential product.

We were also very unsure if any of our current customers would be around even to pay invoices, even if they are able to.

Thanks for your replies, it does make the situation more difficult. It would be preferable to cut hours rather that stand half down - but doesn’t look like that is the best solution financially for staff.

I think we all need to wait for the full HMRC documents on Wednesday after the Bill passes

”Laying off and being made redundant are the same in common conversation”

In the US, yes. Most people in the UK use redundant. And anyway this isn’t “common conversation”, it’s employment law. People who don’t know better use the wrong terms for things all the time. Doesn’t mean people who know the proper terms and legal definitions are wrong. And at the moment, these things are important, and using incorrect or misleading terminology is unhelpful.

”Laying off terminates the contract, it doesn’t just put it on hold for a while”

How about I stick to employment law, which means I know what laying off means, it has a specific definition as I’ve said, and you stick to whatever you know about and stop telling me I’m wrong about my area of expertise?

Time to chillax, flowery!

flowery, it doesn’t really matter what your areas of expertise is or what the technical distinction is

The fact is, in common language, ‘being laid off’, to most people means having no job anymore, hence the need for a word which makes the distinction clear

Rishi used the american word 'furloughed' so I suggest we all start using it too.
New times, new word

Do you have a pay slip. Surely, you know if you pay n.i , taxes etc ? Can you look in your paperwork ?

Agree with bearbehinds concerns about how it will actually work if you need to keep some staff to try keep some income coming in to cover overheads etc and maintain the business as it’s not just about wages but then some staff get to stay home doing nothing for 80% pay and others have to still work

”Time to chillax, flowery!”

You’ve obviously had a much easier week that every other HR person I know. Good for you. Don’t tell me to chillax thanks very much.

”The fact is, in common language, ‘being laid off’, to most people means having no job anymore”

Maybe, but that’s not when you said. You told me that laying off means terminating the contract. It doesn’t, it’s that simple. Don’t talk with pretend authority about things you don’t know.

As I said, people use the wrong terminology all the time, but if it’s not their area of expertise, most people aren’t arrogant enough to start telling people what things mean.

flowery, thank you for proving my point. Go pour yourself a nice large glass of wine. Seriously.

@Twattage13 you clearly don’t understand how VAT works. Just because you pay it doesn’t mean it is a cost to you, you collect it from your customers and you pay this less the amount you have suffered in VAT over to HMRC. VAT is a tax on consumers not on you.

And yes you pay tax on dividends but at a lower rate but there is no NI for employees or employers on dividends so you do not pay as much to HMRC. If you are that concerned put it all through as salary and pay full whack of tax and NI.

.

Do you have a pay slip. Surely, you know if you pay n.i , taxes etc ?

Yes I pay taxes and NI! I just want to know if I count as an employee so I’m eligible for this 80% help. My payslips don’t tell me if I count as an employee of the business or not, although it seems from what some other PPs have said that I probably do?

A director of a ltd company is an employee of the company. Look in your last year’s set of accounts where number of employee is 1 = you. You are on payroll but under the NI threshold which still protects your pension rights.

BTW you won’t be getting a payslip if you weren’t an employee. I think that answers your question.

Well thats come back to bite you only taking a minimum wage through payroll to avoid paying income tax.

What a spiteful post. As I said earlier in the thread, I’d be ecstatic to receive 80% of £12500 over three months - it would be an enormous help.

I don’t understand why some people seem to have it in for people who run their own businesses. I’ve worked six or seven days a week for years, have taken massive risks to get my business up and running and have given it everything I’ve got. To see everything I’ve built up disappearing before my eyes in a matter of weeks is utterly heartbreaking and terrifying, and I’m in danger of losing my home if I can’t get through this. People like you are just vile, gleefully revelling in other people’s misery.

Regardless of the wage taken, director only companies are likely to be excluded.

@ListeningQuietly how do you know this?

Me too and following for insights. I have taken 'what I can' each month dependent on how the business is doing; sometimes I have to sacrifice salary if it's been a bad couple of months. Accountant does all the books. Let's wait and see

Thank you @Hotelin - I really hope so