Reply to: Ltd Company and Furlough Scheme

[northernladuk]

That's not part of a directors official responsibility.

[jamed]

But a contractors role includes selling, marketing and other activities as well as doing the role. Organising work is part of our work, it isn't for a permie.

Maybe, maybe not. We all know this is a bit of a grey area with a number of people debating that it's fine to look for another contract whilst on furlough and others saying it's not. There is no clear guidance for LtdCo contractors in this situation and personally don't think HMRC would come after anyone for attempting to find new work and stop relying on gov for furlough payments.

Could argue in this case it's the director's role who is arranging for his "employee" to wrap up the engagement correctly.

[northernladuk]

I personally think people are looking at this too technically. I can understand not working but "arranging to work" should not be the case to un-furlough oneself.

If a normal employee was furloughed and their managed called them to let them know they will be required to come back to work in 2 weeks, should they be removed from furlough from that point in time? I don't think so, unless someone has some guidance I've missed.

But a contractors role includes selling, marketing and other activities as well as doing the role. Organising work is part of our work, it isn't for a permie.

[jamed]

My accountant has told me this when I said I want to come out of furlough after the client messaged me to say they want me to do a handover for 1 to 2 days prior to terminating the contract:

"When you are furloughed, you should not be completing any work at all including looking for work (arranging to work), invoicing etc."

As I have been furloughed more than 3 weeks I do not see a problem, if necessary I can terminate the furlough as of the day prior to the official communication from the client,, then do that work then go back onto furlough again.

The invoicing point seems odd. I stopped work on contract on 20th March and raised the invoice on 3rd April. So it seems I cannot backdate my furlough claim to any time before that invoice

I personally think people are looking at this too technically. I can understand not working but "arranging to work" should not be the case to un-furlough oneself.

If a normal employee was furloughed and their managed called them to let them know they will be required to come back to work in 2 weeks, should they be removed from furlough from that point in time? I don't think so, unless someone has some guidance I've missed.

[northernladuk]

Arranging to do the work shouldn't be done in furlough. The minute you spoken to the client, email or other you are off.

Oh.. Which is kinda what you said already.. Nvm

[MPwannadecentincome]

My accountant has told me this when I said I want to come out of furlough after the client messaged me to say they want me to do a handover for 1 to 2 days prior to terminating the contract:

"When you are furloughed, you should not be completing any work at all including looking for work (arranging to work), invoicing etc."

As I have been furloughed more than 3 weeks I do not see a problem, if necessary I can terminate the furlough as of the day prior to the official communication from the client,, then do that work then go back onto furlough again.

The invoicing point seems odd. I stopped work on contract on 20th March and raised the invoice on 3rd April. So it seems I cannot backdate my furlough claim to any time before that invoice

[northernladuk]

I think you missed my point.

Yes, you can run it through the LTD but it is not responsible as your employee runs company into debt. If I was a shareholder of such company I would report it.

Erm right.. That's nice... Thanks..

[elsergiovolador]

You've completely missed the point. They guy isn't in contract yet he's stating his company is outside IR35. There is no such thing.

And it is possible still to be inside and run it through the LTD.

I think you missed my point.

Yes, you can run it through the LTD but it is not responsible as your employee runs company into debt. If I was a shareholder of such company I would report it.

[LondonManc]

This is simply not true. Inside "gig" has profound impact on your company that is your company won't see a penny from the engagement (except for 5% relief if in private sector).

If you go "inside" then you become deemed employee of the (not really a ) client and you are no longer a business (from the perspective of that particular contract).

You can of course loan the money to your company so you can keep the lights up.

But I can't see how someone even considering "inside" be perceived as business.

Taking a £1000 a day inside contract compared to a £300 per day outside contract can be seen as in the best interests of the shareholders of your company. It therefore makes good business sense to stop taking on new business while that person works on the inside contract. It could be a short-burst, 8 week gig but that's 40 grand and 42 more workable weeks in the company financial year. Not everything is cut and dried with inside versus outside.

[northernladuk]

This is simply not true. Inside "gig" has profound impact on your company that is your company won't see a penny from the engagement (except for 5% relief if in private sector).

If you go "inside" then you become deemed employee of the (not really a ) client and you are no longer a business (from the perspective of that particular contract).

You can of course loan the money to your company so you can keep the lights up.

But I can't see how someone even considering "inside" be perceived as business.

You've completely missed the point. They guy isn't in contract yet he's stating his company is outside IR35. There is no such thing.

And it is possible still to be inside and run it through the LTD.

[elsergiovolador]

It's got absolutely sweet FA to do with your company as an entity. It cannot be inside or outside. Each gig you do is. You could do an inside and an outside one in parallel if you want. It has zero bearing on the company.

This is simply not true. Inside "gig" has profound impact on your company that is your company won't see a penny from the engagement (except for 5% relief if in private sector).

If you go "inside" then you become deemed employee of the (not really a ) client and you are no longer a business (from the perspective of that particular contract).

You can of course loan the money to your company so you can keep the lights up.

But I can't see how someone even considering "inside" be perceived as business.

[Andy Hallett]

Firstly I apologise if this has been covered elsewhere but was struggling to find.

Situation: I am a director and employee of a ltd company (outside IR35) and have recently lost my only contract due to covid. I am considering applying for the furlough scheme on my salary but had some concerns:
1. I understand searching for a new contract is not allowed. How is this defined? Is the onus on me to prove i did not look for a new contract (for me usually through recruitment agents)? Surely the sooner i would have a new contract the quicker i could stop claiming.
2. IR35 status. I am concerned that claiming furlough would compromise my IR35 status (outside) or be a red flag for investigation?
3. I understand that claims for furlough could be retrospective. So if a new contract had not surfaced in say 2 months i could claim retrospectively? However this leads me back to point 1 about not searching for new contract.

Needless to say i'm a bit puzzled on what to do. Anyone in the same position or have any advise.. it would be greatly appreciated?

Again sorry if this has already been discussed

1) Furloughed workers are allowed to undertake other employment, looking for a role is not working.
2) You will be fine
3) Not sure it can be, your company needs to agree furlough with the worker (I note it is you having a conversation with yourself). And you will need to show a document trail if investigated. The minimum furlough period is 3 weeks. The only way you could retro it is committing perjury.

HTH

[simes]

ADVICE!!

Wow!

Spelling tips from Northern! That is really quite erm, Something...

[northernladuk]

Thanks for this! Yes you're of course right about the IR35 status being per contract.. my bad. Just want to avoid any unnecessary reason for investigations

Knowing the basics of IR35 would be a decent start.

[redrabbit]

Thanks for this! Yes you're of course right about the IR35 status being per contract.. my bad. Just want to avoid any unnecessary reason for investigations