Reply to: CJRS while on the bench with ad-hoc work

[Lance]

I was checking HMRC recommendation and here is what it says:
https://www.gov.uk/guidance/claim-fo...tention-scheme

So it's allowed to get furlough from the LTD and be paid by the brolly from another contract.

Morally wrong? Probably. Fraud? Definitely not.

you may well be right.
But it's a bit like not having to pay tax on a loan IMO. And look what happened there.
The government already see contractors as disguised employees.
The public already see contractors as tax dodgers.
To take a rule meant to save peoples jobs, and abuse it for personal enrichment, is not just immoral, it has risks.

I note that you say 'definitely not fraud' But that's your interpretation. And the interpretation of a lay person at that.
You ANAL. Neither am I.

An ex-barrister told me once that anyone who says "something is law", if they not a lawyer they are wrong. Wise advice.
For the few hundred pounds furlough will get you, is it worth it?

[cwah]

I was checking HMRC recommendation and here is what it says:

"When your employees are on furlough


During hours which you record your employee as being on furlough, you cannot ask them to do any work for you that:

• makes money for your organisation or any organisation linked or associated with your organisation
• provides services for your organisation or any organisation linked or associated with your organisation

Your employee can:

• take part in training
• volunteer for another employer or organisation
• work for another employer (if contractually allowed)"

https://www.gov.uk/guidance/claim-fo...tention-scheme

So it's allowed to get furlough from the LTD and be paid by the brolly from another contract.

Morally wrong? Probably. Fraud? Definitely not.

[jamesbrown]

I know the word fraud gets bandied about a lot but as I understand it legally fraud is 'deliberate deception with the intent to gain financially from that deception' and you can be locked up for this.

Morally wrong? Well that is subjective. I have claimed CJRS and asked myself the same question. Had directors been excluded I think many here myself included would have just accepted it as part of being in business on one's own account.

It's worth remembering however that the self employed can receive support and continue working.

I think you should read again the post to which that comment referred. It had nothing to do with the ordinary use of the CJRS by contractors, which is perfectly fine.

[Contreras]

I know the word fraud gets bandied about a lot but as I understand it legally fraud is 'deliberate deception with the intent to gain financially from that deception' and you can be locked up for this.

Morally wrong? Well that is subjective. I have claimed CJRS and asked myself the same question. Had directors been excluded I think many here myself included would have just accepted it as part of being in business on one's own account.

It's worth remembering however that the self employed can receive support and continue working.

[NotAllThere]

Is it?

So a receptionist for a bank is furloughed because no-one visits HQ anymore. They get a job as a receptionist for an optician because they either need the money or just want to not go crazy.

Is that illegal? I don't think the rules are massively prescriptive.

I agree morally there's a question to answer but I don't think it's fraud.

Fair point. Possibly fraud.

[ladymuck]

Adding because it's fraud.

Is it?

So a receptionist for a bank is furloughed because no-one visits HQ anymore. They get a job as a receptionist for an optician because they either need the money or just want to not go crazy.

Is that illegal? I don't think the rules are massively prescriptive.

I agree morally there's a question to answer but I don't think it's fraud.

[NotAllThere]

Adding because it's fraud.

[northernladuk]

Apparently you can also "work elsewhere while furloughed"

So what is to stop you keeping you limited company open, keep paying your 80% salary which is claimed back from Govt, then "working elsewhere" for your new employer which is your new brolly contract, and double dipping?

Because, unless you are working in the canteen or emptying bins, it would be blatently obvious to everyone and their dog what is going on. You are an IT consultancy. Doing any IT consultancy will be factored as the same work. Doesn't matter what the name of the role is.

Add 'common sense' to JB's morals point.

[jamesbrown]

Apparently you can also "work elsewhere while furloughed"

So what is to stop you keeping you limited company open, keep paying your 80% salary which is claimed back from Govt, then "working elsewhere" for your new employer which is your new brolly contract, and double dipping?

Some morals, perhaps?

[Royston1664]

Apparently you can also "work elsewhere while furloughed"

So what is to stop you keeping you limited company open, keep paying your 80% salary which is claimed back from Govt, then "working elsewhere" for your new employer which is your new brolly contract, and double dipping?

[Sintra]

What is unclear however is how to apply flexible furlough going forward.

How the heck does a company director taking a fixed salary account for "usual" and "worked" hours? The CJRS portal requires both these numbers for a flexible furlough application.

Is it still possible, post-July, to un-furlough for a set number of days and re-furlough as before?

I'm a bit late to this thread, but here goes. Those are good questions, and the kind of thing I would look to my accountant to advise on. There seems to be a general lack of clear guidance from the authorities when it comes to ltd company contractors / PSCs, which is rather frustrating. Makes me think there's a lot of potential for problems over 'interpretation', so whether there will be a reckoning later on when Gov/HMRC decide to try and claw money back to fill the coffers, or whether they really have just accepted and written off the fact that there's going to be incidental claims on an unsound basis, I don't know. And if they did do some kind of audit and found cases that shouldn't have received CJRS, who knows what the consequences would be (would maybe depend on how plausible or otherwise the claim was in the first place).

Anyway, I'm in a similar situation (had some time off / was on the bench for a while anyway, but still getting director's wage and doing minimal admin) but one thing that gave me pause for thought was this article: Coronavirus Job Retention Scheme: can directors furlough themselves? | Insights | Bishop Fleming

Note the final section on case law, including the quote, “Unfortunately, it is not an automatic assumption that you are an employee of your own limited company” - notably where the director is the sole shareholder and sole employee. Has anyone looked into that aspect with regard to furlough / CJRS? I also note that it says "Is there a genuine contract of employment between the director and the limited company?" - I know several contractors who set up purely to work via an agency and have a written contract with that agency, but I'm not sure all have a written contract between themselves and their company, being sole contractors who just set up a 'personal service company' as a prerequisite to deal with their clients. Anyone here in that position? Who knows whether this level of detail will ever be looked at in the context of the job retention scheme, but nonetheless it's interesting to note that the rules could potentially be even gnarlier than they may first seem.

** UPDATE ** (and apologies if I was again late to the party in realising this...)
I now see that the CJRS eligibility wording on GOV.UK specifically says, "As office holders, salaried Company directors are eligible to be furloughed and receive support through this scheme", so as long as you're salaried, I don't think that 'employee or not' conundrum is a worry after all.

[Contreras]

Before flexible furlough you had to un-furlough and re-furlough if you started a bit of work, observing the required minimum periods for a claim. It sounds like the OP has done all of this so should be fine.

What is unclear however is how to apply flexible furlough going forward.

How the heck does a company director taking a fixed salary account for "usual" and "worked" hours? The CJRS portal requires both these numbers for a flexible furlough application.

Is it still possible, post-July, to un-furlough for a set number of days and re-furlough as before?

[CheeseSlice]

Before flexible furlough you had to un-furlough and re-furlough if you started a bit of work, observing the required minimum periods for a claim. It sounds like the OP has done all of this so should be fine.

[Contreras]

I was on the bench from May to Sept, however still took a salary in those months so guessing I am not eligible for CRJS?

qh

Eligible only *if* you take a salary. Ergo, not eligible if you don't take a salary.

Actually it's the company that is eligible, or not.

Calculated on the salary amount you took (and declared via RTI) up to Feb '20.

It's the company that receives the grant, if it continues to employ (and pay) you.

The rules have evolved with each extension of the scheme. There have been cut-off dates for retrospective claims. There was a requirement of being previously furloughed for at least 3 weeks period pre-July - I'm unsure if that rule still stands.

[quackhandle]

I was on the bench from May to Sept, however still took a salary in those months so guessing I am not eligible for CRJS?

qh