Monday, 30 March 2020

Directors and Furlough

There is one question we have been asked more than any other by directors since the furloughing guidelines were issued…

Can I furlough myself? 

We would like to share our updated thoughts on this subject and why you don’t have to (completely) make your mind up just yet. 

Basically, you are asking two questions…

1. Can I Furlough myself? 
2. Can I claim back 80% of my salary from the government?



Let’s deal with the first one…

Can I furlough myself? 

There has been much debate within the accountancy profession on this matter and the simple answer is “Yes”.  

So, if you have found yourself in a position where you have no work and you believe that situation will last for at least 3 weeks, please sign and retain a copy of the letter in the link below and furlough yourself.  The letter needs to be sent from your limited company to yourself (and the other directors if you need to).  We will be asking to see it if we make a claim on your behalf when we can.

https://www.hillmans.co.uk/furlough-leave-agreement 

Whilst, furloughed you are only allowed to carry out duties of a director.  You will find a full list of what you are allowed to do here…

https://companieshouse.blog.gov.uk/2019/02/21/7-duties-of-a-company-director/

These guidelines were not issued with furloughing in mind so are open to interpretation.  However, we believe that maintaining the company’s statutory and financial records are the responsibility of the directors and can therefore be kept up to date.  

Second question…

Can I claim back 80% of my salary from the government?

This is a question that does not need an answer now.  The portal to make the claims will not be live until at least the end of April. When the portal is ready, we will ask you if you have met the conditions to make a claim and, if so, we will assist you to make one.  Hopefully, by then we will have some further clarity on what “furloughing” means for directors so you will be clearer on whether you are eligible for a claim or not.  

To be clear, any possible claim will only be for 80% of your salary and not include any dividends you pay yourself.

We hope this post gives you some clarity on the position we are taking.  No doubt you will see all sorts of different opinions on social media and in the press over the coming weeks.  However, as soon as we have definitive guidance from the government on what directors can or can’t do whilst furloughed, we will be able to advise further.  

Best wishes,

Steve

Steven Hillman ACA
Chartered Accountant

No comments:

Post a comment