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Sole director employee and furlough

  • Fellow
  • Practice Licence
  • 73 posts
  • # 119297

Does anyone have any experience of sole director employees applyng for the JRS, I have a client who has just tried and has was told him he is not eligible but I cannot see why.  He pays himself the minimum amount in favour of dividends and does also operate under CIS within the company.  

I would be interested to know if anyone else has known of and problems, or if anyone knows a reason why this should be.

He has tried calling them but as expected the lines are busy and the chat lines are down.

Thanks

Jane

 

  • Member
  • Practice Licence
  • 8 posts
  • # 119298

Hello this is something we looked into initially for one of our client who is a director when the scheme was first set up and this is our understanding.

 

The JRS is to enable companies to access financial support towards paying employees wages. This does not cover dividends as they are not classed as employee wages, they do not go through the PAYE system. A director of course can be an employee also and could be receiving a salary through PAYE so in essence the director could be furloughed and claim for their salary portion, provided they meet the criteria. However when it was initially set up this did mean the director would not be able to carry out any tasks that generate revenue for the company. There are now flexible hour options with furlough but how you would determine a directors hours could be difficult depending on the company. But what is definitely clear is a director cannot claim for support towards dividends, only PAYE salary.

 

Hope that helps.

  • Fellow
  • Practice Licence
  • 73 posts
  • # 119301

S.Ballard said:

Hello this is something we looked into initially for one of our client who is a director when the scheme was first set up and this is our understanding.

 

The JRS is to enable companies to access financial support towards paying employees wages. This does not cover dividends as they are not classed as employee wages, they do not go through the PAYE system. A director of course can be an employee also and could be receiving a salary through PAYE so in essence the director could be furloughed and claim for their salary portion, provided they meet the criteria. However when it was initially set up this did mean the director would not be able to carry out any tasks that generate revenue for the company. There are now flexible hour options with furlough but how you would determine a directors hours could be difficult depending on the company. But what is definitely clear is a director cannot claim for support towards dividends, only PAYE salary.

 

Hope that helps.


 Thanks for your help.  I was aware it would only cover PAYE etc.  It turns out to be a technical issue which hopefully can be sorted with HMRC.

 

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