Loan-account happy director enforces pay cut for everyone else

[NotAllThere]

Get together with the other employers and strike.

[JoJoGabor]

Heap, get out. I had something similar a few years ago and ended up losing a months wages and expenses, while directors still drove around in their expensive leased cars and gave themselves payrises to squeeze as much as they could personally out of e company.

[SueEllen]

The last few months’ sales figures have been worse than expected, and despite the profits made year to date (record sales and profits), a cash flow problem has developed. Yet I don't feel asking staff to accept a pay cut to fund, what I see as past mismanagement and greed by the director of a company is fair. Surely a director of a Ltd company has responsibilities, even if he does own the company?

Find another job asap.

I had friends working for companies in similar situations at the end of the dotcom bubble. Their companies went bust when HMRC weren't paid. HMRC can force companies into administration.

[WorriedJim]

Our director wants to cut all employee pay by 6% to stave off cash flow problems. He claims the business has not made enough money this financial year to pay off it's creditors. This isn't true, the business has made an operating profit of 228,000 (before corporation tax), and out of this paid 78,000 in loan commitments, giving a surplus of 150,000.

The reason we have a cash flow problem is our boss has taken out well in excess of 150,000 in the form of director’s loan. Over 250,000 in fact, year to date. This figure has been funded partly by profits and partly by the business being granted more lending facilities. Meanwhile we continue to pay creditors (including HMRC) late.

The last few months’ sales figures have been worse than expected, and despite the profits made year to date (record sales and profits), a cash flow problem has developed. Yet I don't feel asking staff to accept a pay cut to fund, what I see as past mismanagement and greed by the director of a company is fair. Surely a director of a Ltd company has responsibilities, even if he does own the company?