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?

Hotelin
In many cases - such as the employers NI allowance, directors who are majority shareholders DO NOT count as employees

Unless I’ve misunderstood, you won’t be getting 80% of £12,500 if that’s your annual, excluding dividends. You’d be getting 80% of your monthly income for three months.

So that would be £833 per month for three months (assuming dividends are excluded).

Someone correct this if I’m wrong.

cucumber66 As I understand it
If you are on the payroll of your Ltd company you will be OK for 80% of your salary as an employee (even if you also get dividends), plus 80% of all your employees
If you are not and just get paid dividends as a director - you won't.

I would persevere with the takeaways, ramp up the social media, appeal to your customer base. May take a few days but I know a local restaurant to me is possibly busier on takeaway than they could fit in the restaurant, having posted photos of menu, of completed meals, of staff blue gloved aproned and masked up, details of their hygiene policy pretty constantly. They already did do takeaway but on a fairly low key scale. They now are appealing to their sit down customers with great success. You phone and order & pay over the phone & give reg number, they tell you what time, you go and park in their car park and ring them again and open your boot, they bring it out and pop it in your boot, you close the boot and go. So completely contactless. Their FB page is full of citations as to how yummy the food is, how seamless the service etc. However I know the owner was really worried it wouldn't work, but a week in people are finding they're a bit disappointed with their stash of 44 tins of tuna and eight cauliflowers and this is a great food offering locally with a good reputation and just as tasty as a takeaway. And the more that try it, the more the FB hype as to how lovely it is.

Sorry last paragraph was @vinosaurus

If you are on the payroll of your Ltd company you will be OK for 80% of your salary as an employee (even if you also get dividends)
WRONG
because directors of close companies are not treated as employees for other allowances

Unless I’ve misunderstood, you won’t be getting 80% of £12,500 if that’s your annual, excluding dividends. You’d be getting 80% of your monthly income for three months.

Sorry @pmdw - yes that’s what I was expecting too. I think I worded it badly before.

@ListeningQuietly you seem very sure on this - are you a qualified accountant?

Until HMRC produce detailed rules/guidance, no one knows. Pointless whingeing about accountants not being contactable over the weekend and then planning to phone your accountant first thing Monday morning.

WE KNOW NO MORE THAN YOU at the moment. You have to wait until HMRC produce the detailed guidance. Anyone saying anything about who will qualify for the 80% etc is just talking nothing but guesswork.

I agree that we have to wait for the full terms to come out, but there are a lot of small companies with only employees being directors. These are not the big profitable businesses, just people feeding their families so I am guessing we will be included. I can’t see how they would justify not given they are supporting the self employed who are normally left to sort themselves out.

cucumber
Only for the last 30 years

@cucumber there are more of us on MN than you think :)

@ListeningQuietly Hmm. Well I will wait to see what HMRC say on Monday. As others have pointed out, no guidance has been made available on this yet, so you can't know for sure that I'm not entitled to the 80%.

Until HMRC produce detailed rules/guidance, no one knows. Pointless whingeing about accountants not being contactable over the weekend

Whinging? All I said was that my accountant's not available until Monday - stating a fact. I could lose everything I have. Do you have any bloody clue how stressful that is?

@MuddyDog I'm fully aware of how VAT works thank you v much - I don't think in these times there is any need to be patronising to owners of small businesses.

The tax on dividends is only free for the first £2k per annum so no I personally don't pay hardly any difference, but I take all the risk of having no client work (as I have none now). I am not sat there earning a guaranteed 80% wage right now plus holiday, sick pay, pension payments all accruing as well from my employer.

Suggest you try to be a bit more helpful and lot less shitty in these difficult times.

Yes we have to wait and see how HMRC give the detail which I think I have read will be on Wednesday as nobody knows at the moment. Other forums on the web though are suggesting that a 1 person director limited company will no doubt not be eligible - and that is me and all of my business has now been cancelled as well. We will see in time.

New to this thread and it's a great to read these thoughts on this. I'm in the same boat - only employee of my Ltd company. Don't see the point in bothering my accountant until detail are released by Sunak/HMRC, so until now i've felt completely in the dark.

@friendlycat, from what you just said it sounds as though even if/when Sunak announces help for the self employed (he's get pressure from all quarters to do so), we Ltd company director/employees will still get nought.

@duncanc
I don't know but other forums are suggested we Ltd company director/employees will not be in line for any payments. I fully get that if we were to be it would only be on the salary portion percentage and not dividend but as always the devil will be in the detail. My company area is hospitality pubs so absolutely no work whatsoever now! Same with many suppliers.

Well that's 5 millions votes the Tories won't be getting in the next local and general elections

Well that's 5 millions votes the Tories won't be getting in the next local and general elections
Yeah right.

Farmers voted for Brexit
Poor people vote for Tory austerity
Old people vote for Tory cuts to adult social care

I see your point, people are stupid. However, i think leaving 5 million in serious debt or worse by the end of this will be a wake up call for those of them that previously voted against their own welfare.

I'll believe it when it happens.
Turkeys vote for Christmas all the time (look at the USA and Brazil and Australia)

Don't see the point in bothering my accountant until detail are released by Sunak/HMRC, so until now i've felt completely in the dark.

I spoke to my accountant today and he said he doesn't know any more than I do at this stage - like others have said here, we have to wait for the detail from HMRC.

I don't think the government would intentionally not offer any lifeline at all to people in our position though - why would they? There must be hundreds of thousands of us!

I don't know but other forums are suggested we Ltd company director/employees will not be in line for any payments.

What is their reasoning for this @friendlycat? It's all speculation at this stage so I remain hopeful...

I don't think the government would intentionally not offer any lifeline at all to people in our position though - why would they?

You can count on Tories to be pragmatic. I think all they care about is how quickly the economy restarts after the virus, rather than remedying hardships. Hence the quick shout out to companies not to sack PAYEs, since rehiring may be a drawn out process, yet nothing remotely substantial for the self employed.

When it comes to the self employed, my guess is that they're thinking when this ends it'll be straight back to business as usual for them - that workforce being ready and more eager than ever when the jobs appear.

As for Ltd company owners i don't see it being such a quick transition back to work. Many will have fold up the company and sign on for benefits in order to eat and pay rent (delaying rents is a hollow offer).
That's a double whammy for the economy, since those companies will no longer exist when the economy restarts and those individuals won't necessarily be straight back to work, but instead drawing benefits for an initial period.

This is obviously just my totally uninformed guess work, but i think it's safer to bet Tory policy will be based upon cost efficiency and not hardship - this is the austerity party after all. Pushing us director/employees into benefits etc may well be less cost efficient when we exit the lockdown. Maybe i'm wrong, but if not it makes pragmatic sense to offer us similar help as that given PAYE.

You can count on Tories to be pragmatic
Ha ha ha ha ha
Cummings is a nihilist anarchist.
He wants to break everything
The government are being entirely reactive and not at all proactive
don't get me started on how useless Corbyn is being though

Does anyone know when this guidance will appear?

Cummings is a nihilist anarchist.
He wants to break everything

It's the psychotic pragmatism of the gas chambers.

Btw, I don't want to derail this very useful thread, so i'll leave it there :)