View our other guidance pages:
- COVID-19 – Resources, Guidance and Help
- Coronavirus Job Retention Scheme (CRJS)
- Small Limited Companies and Covid-19
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We have been advising clients who are sole directors of small limited companies that they could not furlough themselves under the Coronavirus Job Retention Scheme (CRJS) as it is not possible for them to be engaged in no work activity.
We now have further guidance.
Ben Kerry, Head of Labour Markets, HM treasury said:
“With respect to Directors and owner managers, that does not disqualify them from being furloughed so long as they are on PAYE payroll. I understand that they will have some statutory duties and obligations such as filling up their accounts and they will still be allowed to undertake those statutory duties whilst they are being furloughed so that would not count as doing work. So one of the key conditions of the furlough scheme is that the employee is not allowed to work for the employer but if you are the owner-manager and you do have statutory duties then you can continued to undertake those duties while being on furlough.”
[Quoted from CBI.org.uk, “Daily Coronavirus webinar”, 27th March 2020]
Please remember that you will only be able to claim for up to 80% of your monthly salary which will typically be around £720 (80% being £576). Dividends are not covered by the scheme.
Although HM Treasury has not defined “statutory duties”, section 172 of the Companies Act 2006 states that directors have the following duty “promoting the success of the company” and specifically states that this includes:
- the interests of the company’s employees,
- the need to foster the company’s business relationships with suppliers, customers and others,
We advise that directors should now consider furloughing under the Coronavirus Job Retention Scheme (CRJS).
As you will appreciate the situation is constantly evolving but to speak to our specialist team please contact ATN on 01474 326224. Alternatively, visit the website; tweet @atnpartnership or email firstname.lastname@example.org