17 April 2020
A few weeks ago, many of us had not heard of this phrase and now it seems to be all a lot of us are talking about.
We are not Employment Law specialists, however the article below, written by our governing body, Institute of Chartered Accountants for England and Wales (ICAEW), gives a good explanation of their understanding of the scheme and also contains links to more detailed information now available from HMRC.
With regards to Directors being furloughed, the advice on this has been updated as of 4 April 2020:
Office holders can be furloughed and receive support through this scheme. The furlough, and any ongoing payment during furlough, will need to be agreed between the office holder and the party who operates PAYE on the income they receive for holding their office. Where the office holder is a company director or member of a Limited Liability Partnership (LLP), the furlough arrangements should be adopted formally as a decision of the company or LLP.
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, for instance, 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).
For specific information on how to make a claim, including what information you need and the latest information on the HMRC portal availability, please visit the link below: