Reply to: Furlough?

[Lance]

He has asked his accountant, currently awaiting response. Obviously he is in a bad place at the moment so providing him some help.

Thankfully my income has not been heavily impacted, feel for those who have.

does bad place mean "nothing better to do due to having no work"?
Cos that would be a good place to do research IMO.

When finished researching furlough he can read up on bleeding radiators.

[Old Greg]

Check the Coronivirus section of the forums. Covered all sorts I great depth there.
You've posted in the wrong area of the forum.

Unless the friend provides gladiatorial services.

[northernladuk]

He has asked his accountant, currently awaiting response. Obviously he is in a bad place at the moment so providing him some help.

Thankfully my income has not been heavily impacted, feel for those who have.

Check the Coronivirus section of the forums. Covered all sorts I great depth there.
You've posted in the wrong area of the forum.

[325i]

Why don't you get your 'friend' to register himself on the forum and ask the question... Or just tell him to ask his accountant... Or someone else that has a clue.

HTH

He has asked his accountant, currently awaiting response. Obviously he is in a bad place at the moment so providing him some help.

Thankfully my income has not been heavily impacted, feel for those who have.

[mjcp]

So whats considered statutory duties?

From ladymuck's link:

"...a director must act in a way that they consider, in good faith, would be most likely to promote the success of the company for the benefit of its members (shareholders) as a whole..."

So, I'd argue raising an invoice for a recurring income stream (requiring no effort to fulfil it from the furloughed worker) fits.

But as before, if effort (you know, *work* - as in doing, thinking reading and digesting, advising, coding, taking an input and churning though a spreadsheet to calculate a bill etc...) required, then no furlough.

I guess a non work derived residual might be a license fee or rent. The sort of thing that requires none of the work above and could be automatically generated by your accounts package. (or outsourced to your accountant)

[northernladuk]

Why don't you get your 'friend' to register himself on the forum and ask the question... Or just tell him to ask his accountant... Or someone else that has a clue.

HTH

[ladymuck]

So whats considered statutory duties?

7 duties of a company director - Companies House

[325i]

The Company income is irrelevant.

The relevant bit is is he working on behalf of the company. If yes, no furlough.

You could have a company of 8 people, 6 furloughed and 2 not, the 2 who are not generate the 25% remaining income.

If a company of 1, then you could have residual income and still furlough (not sure if creating an invoice is considered a statutory / allowed work or not). But if the one needs to actively work on behalf of the company to generate the income, then no furlough.

So whats considered statutory duties?

[mjcp]

Thought so. As his company is making revenue, so no furlough?

The Company income is irrelevant.

The relevant bit is is he working on behalf of the company. If yes, no furlough.

You could have a company of 8 people, 6 furloughed and 2 not, the 2 who are not generate the 25% remaining income.

If a company of 1, then you could have residual income and still furlough (not sure if creating an invoice is considered a statutory / allowed work or not). But if the one needs to actively work on behalf of the company to generate the income, then no furlough.

[325i]

no.
Furlough = !working

Thought so. As his company is making revenue, so no furlough?

[Lance]

Although is it possible even though he is still working and getting income?

no.
Furlough = !working

[325i]

Who is earning? The company (aka revenue) or the person (aka income).

The company is earning but only 25% of normal operating. So therefore he is still taking a PAYE salary as usual which I believe is around £700 a month.

[ladymuck]

Who is earning? The company (aka revenue) or the person (aka income).

[325i]

The general consensus is the PAYE part only.

Thanks. Thats what i thought.

Although is it possible even though he is still working and getting income? Only 25% at the moment for the past month or so and likely to continue.

Or is he only eligible if he is earning nothing at all?

[BlueSharp]

A close friend of mine has lost large part of income as with most people at the moment.

He is the director of his ltd company so has a small salary and rest is dividends. What is unclear is can he furlough the PAYE part of his income? Or can he only do that if he lost all his income?

The goverment website doesnt seem clear.

Company directors
As office holders, salaried company directors are eligible to be furloughed and receive support through this scheme. Company directors owe duties to their company which are set out in the Companies Act 2006. Where a company (acting through its board of directors) considers that it is in compliance with the statutory duties of one or more of its individual salaried directors, the board can decide that such directors should be furloughed. Where one or more individual directors’ furlough is so decided by the board, this should be formally adopted as a decision of the company, noted in the company records and communicated in writing to the director(s) concerned.

Where furloughed directors need to carry out particular duties to fulfil the statutory obligations they owe to their company, they may do so provided they do no more than would reasonably be judged necessary for that purpose, i.e. 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 also applies to salaried individuals who are directors of their own personal service company (PSC).

Company directors with an annual pay period
Those paid annually are eligible to claim, as long as they meet the relevant conditions. This includes being notified to HMRC on an RTI submission on or before 19 March 2020, which relates to a payment of earnings in the 19/20 tax year. The requirement for there to be payment of earnings in the 19/20 tax year applies for any employee being claimed for under the scheme, irrespective of how frequently they are paid (e.g. weekly, fortnightly or monthly). This will be relevant for those on an annual pay period if the last payment notified to RTI was before 5 April 2019 and no further payments were notified until after 19 March 2020.

An employer can make their claim in anticipation of an imminent payroll run, at the point they run their payroll or after they have run their payroll.

Thanks

The general consensus is the PAYE part only.