More updates and guidance on furloughing are coming through all the time, so it’s time to go back to some of those unanswered questions from our last furlough message, with the emphasis here on furloughing you in your capacity as company director, rather than the furloughing of team members.
Can I furlough myself?
Gov’t guidance now says, ‘if you’re a director of your own company and paid through PAYE you may be able to get support using the job retention (furlough) scheme’. I think that’s a Yes.
That’s good, but last time you said that a key condition of the furlough scheme is that the worker cannot do any work for the employer. But even when the business gates are locked there’s always something for me to do.
Martin Lewis has tweeted that ‘company directors CAN be furloughed as employees on their PAYE element, even if they’re the sole employee. Technically they can’t then work for the firm, but can continue to perform their statutory obligations as directors eg official legal filing etc’. He does genuinely seem to be down with the Treasury crowd, but this is not yet the official stance.
Can you be a bit more specific about what kind of work I can do and can’t do if I furlough myself?
It’s not that easy; we’re talking about measures that are being made up on the hoof which are then followed up with patchy guidance from Gov’t and off the cuff musings from Martin Lewis.
I understand this but give me some guidance, please
As I have said, it’s difficult to give definitive advice here, but we would say that it’s probably OK to furlough yourself from the point that you shut your doors and stop doing customer work or making sales or providing services or building stuff or buying stock, etc. Where do you draw the line? Perhaps doing a small amount of promotional activity on social media whilst watching day time telly is OK; but organising a full on advertising campaign would be crossing that line.
OK, I think I can furlough myself, but you’ve always advised me to minimise my salary. How much will I get?
You’re right, we have always advised you to draw a salary equivalent to either the NIC free or tax free allowance, depending on your circumstances. If your salary is £720pm then the value of the furlough will be £576pm. If your salary has been £1,041 then the value of the furlough will be £833pm.
How far back can I go?
This scheme is treated as starting 1st March because HM Gov’t wanted to give businesses the opportunity to furlough staff already laid off before their furlough announcement. But this probably doesn’t mean you. For most of our clients the earliest furlough date is likely to be the Tuesday after Boris announced the lock down last Monday.
What about dividends?
I’m afraid not, although Martin Lewis is campaigning on your behalf to his mates at the Treasury. Interesting justification here for ignoring dividends from the Tory Vice Chair, who says dividends aren’t covered because ‘they are not income’ and ‘’not taxed as income’. We’re ruled by these idiots.
How long before the first of those furlough reimbursement grants arrive?
No change here – Gov’t ambition is still for these start to be ‘paid within weeks’, but first they have to build that furlough portal and there’s still no news on when we can expect this to be ready.
Gov’t is well aware that they really do need to get a move on here; we can’t be in a position where employers are having to pay out for April wages whilst still waiting for their March reimbursement grants to come through as that will create real difficulties for some.
If I increase my salary will I get more furlough money?
The baseline for salaried staff is the Feb-20 payroll, excluding bonuses. This means you cannot increase the furlough grant by increasing yours or anyone else’s March salary.
If the baseline is Feb-20, what about new employees who joined this month?
You can’t furlough someone who joined your business after 28-Feb, so you can’t stick the kids on the payroll at the last minute.
For most of you £576 /£833 is not enough to put food on the table and the government refusal to count dividends is a real blow. Bear in mind that there’s Universal credit that could help. The Universal Credit eligibility rules, especially the removal of the minimum income floor, have been changed and so it’s worth checking to see if you qualify; click here. But be aware that household savings of over £16K render you ineligible to claim Universal Credit as HM Gov’t would rather you burned through your savings instead. We intend to visit the wonderful world of Universal Credit in the near future.