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?

How does that fit though with director's responsibilities to run our companies?

Well that is the big question. Does the fact that you have to run the company exclude you from being furloughed? Certainly you cannot do anything that could be classed as income generating. But arguably you can wear your directors hat to do the compulsory compliance stuff like dealing with tax, filing annual returns etc (unpaid). As soon as you do anything more though eg marketing etc then you are working and not furloughed. It’s very different to the self employed scheme where you can still work.

I suspect most people won’t claim. The new rules will contain the ability for HMRC to inspect and do it would be risky to claim unless you were genuinely doing nothing at all

Apologies for the typos I’m trying to watch a French subtitled film!

I suspect most people won’t claim. The new rules will contain the ability for HMRC to inspect and do it would be risky to claim unless you were genuinely doing nothing at all

I think that's the problem. It's not much money, and I wouldn't want to stop seeking opportunities nor keep relationships ticking over for when things start up again. Thanks for your information!

chng.it/z5vSW25cBn

To be fair it’s entrepreneurial risk. You get the benefit of limiting your personal risk by operating through a limited company and you take on the risk that there will be periods where you don’t make a profit and can’t take dividends.

Hasa
To be fair it’s entrepreneurial risk.
No, sorry, its a dodge by the big organisations to avoid having to pay ERS NI and SSP and AE pensions.
Lots of big companies tell their contractors to go Ltd Company or lose the job
and the latest round of IR35 was getting utterly ridiculous.

The vast, vast majority of single person companies used to be self employed but were forced to go Ltd

same as the huge numbers of "self employed" Uber and deliveroo drivers - not getting SSP, paid holiday, AE pension etc etc

Big business wins
Taxpayers lose

@HasaDigaEebowai I don't suppose you know what it said in the furlough rules about maternity/SSP do you please? I e got an employee coming off maternity leave straight onto furlough, but we don't know whether it's 80% of contracted wage, or 80% of the wage on 28th Feb, which was maternity pay and so massively reduced. Similar for sick pay last month.

knobjockey
Here is a decent data source
www.icaew.com/insights/viewpoints-on-the-news/2020/mar-2020/coronavirus-job-retention-scheme-furlough-guidance

Hasa, thank you so much for your posts!

Martin Lewis has explained this. He’s spoken directly to the treasury this evening. He says -

Only the directors salary is counted, so you can claim 80% of that.
Dividends do NOT count.

That icaew link gives an example of a pub with owner director employees and states they get no income. That seems to say director employees are not eligible for furlough.

Claiming 80% of my salary suits me. I don’t think I could bring myself to claim for dividends too. The country is going to be in enough strife without us all claiming everything. Directors are paid a low amount to keep under the tax threshold so we can’t have it always, we takes the risks etc...

We are going to furlough our employees from next month, they stopped work this week as directed but it is so near the end of the month we might as well wait until a new month and pay them as normal now.

Dh is sending them reading material every day, legislations, regulations, conundrums etc so hopefully when we restart they will be completely up to date and raring to go!

Kailua if you read the chartered accountants link above it looks like directors cannot claim anything.

Apparently being director means you are still working eg dealing with post and phone calls so your not, I think you can apply for the grant or loan though? my partner has to apply for universal credit now but he can't get through to them either not sure if that will come up the same I'll ask him in morning and report back I'm not sure who told him this stuff I'll get the details right x

@ListeningQuietly
Big business wins
Taxpayers lose

Seems like that's the new Tory manifesto

Claiming 80% of my salary suits me. I don’t think I could bring myself to claim for dividends too.

@Kahlua4me, the government keep saying that we're all in this together. So we should all get the same help.

I'm a director/employee who's earned under the 50K threshold the past 3 years, so why should the PAYE, or Self Employed get what they need to survive, but i do not?

Evidently we are not all in this together.

Kailua if you read the chartered accountants link above it looks like directors cannot claim anything.

@septsapp, from the link above:

^Which businesses are eligible?

1. Eligible businesses include charities and not-for-profit organisations and will include single director companies, although the same rules will apply as to other businesses. The grant applies to all UK based businesses.

Owner/managed companies

1. Many owner managed company director/shareholders pay small salaries and the balance of income as dividends. The scheme does not extend to dividends. Only the salary is relevant to the scheme. Such companies must have been paying a salary through a payroll to be eligible for a grant.^

Seems we are eligible for 80% of the meagre PAYE wage. But it needs to have been on pay roll. Since an accountant does that for me once a year i've no idea if is on 'pay roll'. I do hope so!

How will anyone know if a director is still doing minimal admin stuff to keep things ticking over whilst they've furloughed themselves? It seems totally unrealistic for a director and owner of a company to not answer the phone or reply to an email!

Evidently we are not all in this together

That's how I feel.

I'm in the same situation and it's really upsetting, I can't furlough myself because wages aren't the only expense. I have business rents to pay but because I sublet my building I don't qualify for the the business rates relief, I have software, accountancy fees, insurance and loads more. I need to make as much money as I can to cover this so I can't stop working.
I'm not going to be able to draw a wage even though I've never worked harder in my life.

I can't understand why they don't make an exception for the furlough rule for directors?

If they cut the tax free dividends to claw some of this money back I'm going to be furious.

When is the forlough scheme actually up and running? There is nothing to log on to yet is there?

ddc70 evidently we are not all in this together ☹️.

Thank you to others who said to read the link as I hadn’t done that. Seems like I can’t claim after all so will apply to the bank for a business interruption loan instead.

Yes, we can keep working as can reply to emails, phone calls about work, except there aren’t any coming in at all. I haven’t had a single one enquiring about in 10 days now and can’t see that changing any time soon.

Hopefully work will pick up once life has calmed down and employees will be back then. Our apprentice has a year left in his training so I would hate for him to miss out on that and another has just bought a house so need to help him keep up with payments.

Morning all. The new rules have just been published. You cannot do even an hour of work whilst on furlough and so as per my posts last night the vast majority of people will not bother.

John McDonnell (labour), just said on radio 4 that many have been left out. He gave a list of about half a dozen groups ending with people paying themselves dividends through a company.

Great to at least be mentioned at last.

If they cut the tax free dividends to claw some of this money back I'm going to be furious.

The only thing left to us now is to never, ever vote Tory!