Whether or not directors can be furloughed is the most common question we are being asked.
The answer is “maybe”.
Not very helpful but much confusion surrounds this issue.
The first sentence of the most recent guidance from HMRC says:
“As office holders, salaried company directors are eligible to be furloughed and receive support through this scheme.”
This sounds as if there is no problem. However, the guidance goes on to say:
“… they should not do work of a kind they would carry out in normal circumstances to generate commercial revenue or provides services to or on behalf of their company.”
This is pretty clear. If a director only does “statutory duties” he/she can be furloughed.
If the director is doing anything other than statutory duties, he/she cannot be furloughed – at least according to the current guidance.
Statutory Duties will include those required under the Companies Act which are, essentially, to submit accounts and other legally required documents such as a Confirmation Statement.
A director’s statutory duties do not include such things as answering phones, responding to emails, dealing with correspondence, checking premises, communicating with customers or suppliers, processing payroll, applying for loans etc.
Under a strict interpretation of the guidance, any director doing any of these things does not qualify to be furloughed.
The accountancy profession as a whole seems to take the view that directors of small companies are being treated unfairly in comparison with the self-employed. Representations have been made to government to extend the range of tasks which a director can perform and still be furloughed. We wholeheartedly agree, but we need to wait to see if the government takes action.
We do not want to give advice where we do not know if that advice is correct.
No claim for a refund can be made for several weeks and we hope that greater clarification will be forthcoming within that time.
We don’t want to definitely say whether, or not, a director can be furloughed. We will wait until the time when a claim needs to be made, give directors the information we have at that time, then follow the director’s instruction.
As always, we will try to provide help, support and guidance to whoever needs it but existing clients will be prioritised. Contact us by phone (01509 816150), email (email@example.com) or use the form below.