Here are updates on a range of questions that needed more detail including the important one concerning Directors being able to furlough themselves….
Sole directors of limited companies and furlough
We have had many questions as to whether a sole director of a limited company can be furloughed.
There has been further guidance released regarding the Job Retention Scheme and furloughing company directors.
It has now been confirmed that a company director can be furloughed if they are unable to trade due to Covid-19. It was in doubt up until this point as part of the requirements of furloughing an employee is that they cannot undertake any work for the organisation. A director will always have some duties within the company which is where the difficulty lay.
The guidance now states:
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.
The amount of the grant will be salary only, not dividends, which, for many, will be 80% of the current £719 per month- ie £575.20.
To comply with the above the following must be true:
- Only sales invoices for work already completed can be raised, if you are still generating income of any sort, you cannot be furloughed. Therefore, no new income can be invoiced or received (payment of invoices issued prior to furloughing is acceptable)
- If you do receive new work, you can come out of furlough in order to complete this. But please be aware that the minimum furlough period is 3 weeks and therefore you may not be able to claim from the government if your period is less than this.
- No phone calls looking for work can be made- I.e. no phone calls to customers regarding new work, no reaching out to new markets etc
- Answering basic queries from staff or suppliers is OK
- Filing the VAT return, annual return to Companies House or annual accounts is allowable
- Keeping up to date on your bookkeeping/ bank/ bills etc is also OK
If any further information is received we will update as necessary.
Job retention scheme update
The government have clarified the position over the weekend
What can be paid?
You can claim for any regular payments you are obliged to pay your employees. This includes wages, past overtime, fees and compulsory commission payments. However, discretionary bonus (including tips) and commission payments and non-cash payments should be excluded.
What can the employee do?
In short, nothing. The employee cannot undertake any work (not even post, phone calls and emails) whilst furloughed. However, if they are studying, they are allowed to continue their studies.
Can we reduce hours and furlough the rest?
This is not allowed under the scheme. If a person is working short hours they are paid as normal by the company and as agreed with the employee. Only someone doing no work at all can be furloughed.
Can you get other work for another employer while furloughed?
According to the updated guidance employees are permitted under the terms of the furlough scheme to get a second job. However, under the terms of the furlough agreement they can be recalled to work at any time and if they are recalled and do not attend it will need to be treated as unauthorised and unpaid leave.
More information can be found at www.gov.uk/guidance/claim-for-wage-costs-through-the-coronavirus-job-retention-scheme
Small Business Grant Fund
- Under the Small Business Grant Fund (SBGF) all eligible businesses in England in receipt of either Small Business Rates Relief (SBRR) or Rural Rates Relief (RRR) in the business rates system will be eligible for a payment of £10,000.
- Under the Retail, Hospitality and Leisure Grant (RHLG) eligible businesses in England in receipt of the Expanded Retail Discount (which covers retail, hospitality and leisure) with a rateable value of less than £51,000 will be eligible for a cash grants of £10,000 or £25,000 per property.
- Eligible businesses in these sectors with a property that has a rateable value of up to and including £15,000 will receive a grant of £10,000.
- Eligible businesses in these sectors with a property that has a rateable value of over £15,000 and less than £51,000 will receive a grant of £25,000. 10. Businesses with a rateable value of £51,000 or over are not eligible for this scheme.
- Businesses which are not ratepayers in the business rates system are not included in this scheme.
Local authorities have already begun contacting businesses directly regarding these grants.
More information online here
This is taken from the Government Guidance www.gov.uk/government/publications/full-guidance-on-staying-at-home-and-away-from-others#going-to-work
As set out in the section on staying at home, you can travel for work purposes, but only where you cannot work from home.
With the exception of the organisations covered above in the section on closing certain businesses and venues, the government has not required any other businesses to close – indeed it is important for business to carry on.
Employers and employees should discuss their working arrangements, and employers should take every possible step to facilitate their employees working from home, including providing suitable IT and equipment to enable remote working.
Sometimes this will not be possible, as not everyone can work from home. Certain jobs require people to travel to, from and for their work – for instance if they operate machinery, work in construction or manufacturing, or are delivering front line services.
If you cannot work from home then you can still travel for work purposes, provided you are not showing coronavirus symptoms and neither you nor any of your household are self-isolating. This is consistent with advice from the Chief Medical Officer.
Employers who have people in their offices or onsite should ensure that employees are able to follow Public Health England guidelines including, where possible, maintaining a 2 metre distance from others, and washing their hands with soap and water often for at least 20 seconds (or using hand sanitiser gel if soap and water is not available).
Work carried out in people’s homes, for example by tradespeople carrying out repairs and maintenance, can continue, provided that the tradesperson is well and has no symptoms. Again, it will be important to ensure that Public Health England guidelines, including maintaining a 2 metre distance from any household occupants, are followed to ensure everyone’s safety.
No work should be carried out in any household which is isolating or where an individual is being shielded, unless it is to remedy a direct risk to the safety of the household, such as emergency plumbing or repairs, and where the tradesperson is willing to do so. In such cases, Public Health England can provide advice to tradespeople and households.
No work should be carried out by a tradesperson who has coronavirus symptoms, however mild.
As set out in the section on closing certain businesses and venues, the Government has published guidance on which organisations are covered by this requirement. Advice for employees of these organisations on employment and financial support is available at gov.uk/coronavirus.
At all times, workers should follow the guidance on self-isolation if they or anyone in their household shows symptoms.