There is one question we have been asked more than any other by directors since the furloughing guidelines were issued…
We would like to share our updated thoughts on this subject and why you don’t have to (completely) make your mind up just yet.
Basically, you are asking two questions…
1) Can I Furlough myself?
2) Can I claim back 80% of my salary (normally £719 per month) from the government?
Let’s deal with the first one…
Can I furlough myself?
There has been much debate within the accountancy profession on this matter and the simple answer is “Yes”.
So, if you have found yourself in a position where you have no work and you believe that situation will last for at least 3 weeks, please sign and retain a copy of the letter and furlough yourself. The letter needs to be sent from your limited company to yourself (and the other directors if you need to). We will be asking to see it if we make a claim on your behalf when we can.
These guidelines were not issued with furloughing in mind so are open to interpretation. However, we believe that maintaining the company’s statutory and financial records are the responsibility of the directors and can therefore be kept up to date.
We also recommend that, if funds allow, you continue to pay yourself your normal salary of between £719 & £1,025 per month. If your normal salary is different to this, we will be in touch to discuss what you should do. Apologies for the impersonal nature of this advice.
Can I claim back 80% of my salary (normally between £719 & £1,025 per month) from the government?
This is a question that does not need an answer now. The portal to make the claims will not be live until at least the end of April. When the portal is ready, we will ask you if you have met the conditions to make a claim and, if so, we will assist you to make one. Hopefully, by then we will have some further clarity on what “furloughing” means for directors so you will be clearer on whether you are eligible for a claim or not.
To be clear, any possible claim will only be for 80% of your salary and not include any dividends you pay yourself.
We hope this gives you some clarity on the position we are taking. No doubt you will see all sorts of different opinions on social media and in the press over the coming weeks.
However, as soon as we have definitive guidance from the government on what directors can or can’t do whilst furloughed, we will be able to advise further.
In full-filling our mission, we’ll get to know you and your business and what it is that is important to you. We like to build a close and honest relationship with our clients in which we can inspire, challenge and support you to achieve your goals. We provide the best advice and friendly environment for you to discuss and consider your options.