We are directors and want to furlough as not a penny coming in.

neilmcl

LilElvis said:

Luvoj said:

neilmcl said:

Luvoj said:

Under the Coronavirus Job Retention Scheme, all UK employers with a PAYE scheme will be able to access support to continue paying part of their employees’ salary for those that would otherwise have been laid off during this crisis.

This applies to employees who have been asked to stop working, but who are being kept on the pay roll, otherwise described as ‘furloughed workers’. HMRC will reimburse 80% of their wages, up to £2,500 per month. This is to safeguard workers from being made redundant.

If I am unable to access the scheme, I will make myself redundant. That will also mean winding up the business, thereby making my 3 employees also redundant.

I can assure you I will move heaven & earth to prevent that happening to any of us.

We're well aware of what the scheme does but that doesn't take away from the fact that you will unlikely be able to benefit from this as you're not technically an employee. You can't makes yourself redundant but yes you can close your business if that's your choice.

The whole point of this is that the Government have looked ta what the biggest expenditure of business tends to be and that is the wage bill and by them reducing this significantly and by using other means such as grants/loans and business rate deferrals businesses can stay afloat. 

I am not technically an employee; I AM AN EMPLOYEE, as I have attested to.!!!

Why can't I make myself redundant??? I would be due quite a lot of statutory redundancy pay, as would my staff, but we have the reserves to fund that if necessary.

Again, please don't tell me how to run my business that I have successfully run for the last 20 years. I think I know how to do it better than you do.

If your company has, as you say, a reasonable level of reserves then why not just grant yourself a dividend?

He's got all these reserves yet he think's he has no choice but to wind up his company if he can't get the govt to pay his own salary.

Anyone else getting a bit sick of the  "he's got his, where's mines" attitude that seems to be happening now.

Luvoj

LilElvis said:

Luvoj said:

neilmcl said:

Luvoj said:

Under the Coronavirus Job Retention Scheme, all UK employers with a PAYE scheme will be able to access support to continue paying part of their employees’ salary for those that would otherwise have been laid off during this crisis.

This applies to employees who have been asked to stop working, but who are being kept on the pay roll, otherwise described as ‘furloughed workers’. HMRC will reimburse 80% of their wages, up to £2,500 per month. This is to safeguard workers from being made redundant.

If I am unable to access the scheme, I will make myself redundant. That will also mean winding up the business, thereby making my 3 employees also redundant.

I can assure you I will move heaven & earth to prevent that happening to any of us.

We're well aware of what the scheme does but that doesn't take away from the fact that you will unlikely be able to benefit from this as you're not technically an employee. You can't makes yourself redundant but yes you can close your business if that's your choice.

The whole point of this is that the Government have looked ta what the biggest expenditure of business tends to be and that is the wage bill and by them reducing this significantly and by using other means such as grants/loans and business rate deferrals businesses can stay afloat. 

I am not technically an employee; I AM AN EMPLOYEE, as I have attested to.!!!

Why can't I make myself redundant??? I would be due quite a lot of statutory redundancy pay, as would my staff, but we have the reserves to fund that if necessary.

Again, please don't tell me how to run my business that I have successfully run for the last 20 years. I think I know how to do it better than you do.

But you are not an employee in the same way that your staff are. You are both employee and employer. You - unlike other staff - get to set your own rate of pay, something which not even the CEOs of FTSE companies get to do. As both director and shareholder you get to unilaterally decide how much should be paid in dividends, and then receive it (saving significant amounts of tax in the process).

If you wish to pursue the concept of making yourself redundant then you need to speak to your accountant and possibly also HMRC as the £30,000 tax free allowance may not apply to you. 

If your company has, as you say, a reasonable level of reserves then why not just grant yourself a dividend?

I'm the director.  It's only that title, and the management responsibilities that go with it, that makes me different to any other employee.

I can set my own salary at any level I want? I wish!

Why don't I pay myself a divi? Because I am a responsible employer and seeking to retain maximum reserves to use to retain my staff if I possibly can. I also feel I have a duty to them and thier families to try my best to support them during this uncertain time for all of us.

Another anonymous poster who thinks they klnow me and my business better than my 20 years experience has taught me

Luvoj

nickologjam said:

Luvoj said:

nickologjam said:

The situation is not clear and Directors have been deemed both employees or self employed in various situations.

Do you have any examples where a company director is classed as self employed carrying out that role as company director?
(they may be self employed as far as other roles thay may have are concerned)

I don't think I ever recall being classed as self employed, not in the 20 years I have run our business. Not for personal loans, credit cards, residential mortgage, etc. HMRC certainly consider me to be an employee of my company.

Most mortgage lenders view Directors as self employed for proof of income purposes.

Ours didn't. We went with Barclays. Can't comment about anyone else in particular as we only considered Braclays following a recommendation from a broker. But as I understood the broker, he was only considering my salary. Indeed he specifically asked for my P60 to base the offer on.

Also the case of Nesbitt and Nesbitt v Secretary of State for Trade and Industry ruled that the directors of the company were not Employees.

I'm not really sure what that case was about, so unable to say how it relates to this. But the source I'm reading from (Thomson Reuters Practical Law)says:

In Nesbitt and Nesbitt v Secretary of State for Trade and Industry, UKEAT/0091/07, 10 August 2007, the EAT reviewed recent authorities on the employment status of directors and shareholders. It held that the fact that a claimant is a majority shareholder and a director of the employer should not lead a tribunal to conclude that the claimant is not an employee, unless the tribunal finds that the company was a "mere simulacrum" and that, as a result, the contract between the company and the "employee" was a sham.

Which would appear a far way from the assertion that  "directors of the company were not Employees"

For what its worth I’m a director and consider myself to be an employee as I’m paid via PAYE..

Unbelieveable. Anyone got a spare telephone box they could lend this poster?

LilElvis

Luvoj said:

LilElvis said:

Luvoj said:

neilmcl said:

Luvoj said:

Under the Coronavirus Job Retention Scheme, all UK employers with a PAYE scheme will be able to access support to continue paying part of their employees’ salary for those that would otherwise have been laid off during this crisis.

This applies to employees who have been asked to stop working, but who are being kept on the pay roll, otherwise described as ‘furloughed workers’. HMRC will reimburse 80% of their wages, up to £2,500 per month. This is to safeguard workers from being made redundant.

If I am unable to access the scheme, I will make myself redundant. That will also mean winding up the business, thereby making my 3 employees also redundant.

I can assure you I will move heaven & earth to prevent that happening to any of us.

We're well aware of what the scheme does but that doesn't take away from the fact that you will unlikely be able to benefit from this as you're not technically an employee. You can't makes yourself redundant but yes you can close your business if that's your choice.

The whole point of this is that the Government have looked ta what the biggest expenditure of business tends to be and that is the wage bill and by them reducing this significantly and by using other means such as grants/loans and business rate deferrals businesses can stay afloat. 

I am not technically an employee; I AM AN EMPLOYEE, as I have attested to.!!!

Why can't I make myself redundant??? I would be due quite a lot of statutory redundancy pay, as would my staff, but we have the reserves to fund that if necessary.

Again, please don't tell me how to run my business that I have successfully run for the last 20 years. I think I know how to do it better than you do.

But you are not an employee in the same way that your staff are. You are both employee and employer. You - unlike other staff - get to set your own rate of pay, something which not even the CEOs of FTSE companies get to do. As both director and shareholder you get to unilaterally decide how much should be paid in dividends, and then receive it (saving significant amounts of tax in the process).

If you wish to pursue the concept of making yourself redundant then you need to speak to your accountant and possibly also HMRC as the £30,000 tax free allowance may not apply to you. 

If your company has, as you say, a reasonable level of reserves then why not just grant yourself a dividend?

I'm the director.  It's only that title, and the management responsibilities that go with it, that makes me different to any other employee.

I can set my own salary at any level I want? I wish!

Why don't I pay myself a divi? Because I am a responsible employer and seeking to retain maximum reserves to use to retain my staff if I possibly can. I also feel I have a duty to them and thier families to try my best to support them during this uncertain time for all of us.

Another anonymous poster who thinks they klnow me and my business better than my 20 years experience has taught me

Of course you set your salary! You didn't poll your employees and ask them what they thought you were worth, did you? You, probably with advice from your accountant, determine your pay - a prerogative I highly doubt you grant your employees. You are both employee and employer and therefore in a unique position to set your earnings - analogous only to the self employed. 

Like Neil I don't claim to know you, or your business, but I have had more years of experience with the scrutiny which HMRC place on director's dealings than your time as an employer.

calcotti

For tax purposes you are an employee. For benefits such as Universal Credit you would be treated as self employed. Until details of the new government schemes are available we don't know how you will be treated.

Luvoj

LilElvis said:

Luvoj said:

LilElvis said:

Luvoj said:

neilmcl said:

Luvoj said:

Under the Coronavirus Job Retention Scheme, all UK employers with a PAYE scheme will be able to access support to continue paying part of their employees’ salary for those that would otherwise have been laid off during this crisis.

This applies to employees who have been asked to stop working, but who are being kept on the pay roll, otherwise described as ‘furloughed workers’. HMRC will reimburse 80% of their wages, up to £2,500 per month. This is to safeguard workers from being made redundant.

If I am unable to access the scheme, I will make myself redundant. That will also mean winding up the business, thereby making my 3 employees also redundant.

I can assure you I will move heaven & earth to prevent that happening to any of us.

We're well aware of what the scheme does but that doesn't take away from the fact that you will unlikely be able to benefit from this as you're not technically an employee. You can't makes yourself redundant but yes you can close your business if that's your choice.

The whole point of this is that the Government have looked ta what the biggest expenditure of business tends to be and that is the wage bill and by them reducing this significantly and by using other means such as grants/loans and business rate deferrals businesses can stay afloat. 

I am not technically an employee; I AM AN EMPLOYEE, as I have attested to.!!!

Why can't I make myself redundant??? I would be due quite a lot of statutory redundancy pay, as would my staff, but we have the reserves to fund that if necessary.

Again, please don't tell me how to run my business that I have successfully run for the last 20 years. I think I know how to do it better than you do.

But you are not an employee in the same way that your staff are. You are both employee and employer. You - unlike other staff - get to set your own rate of pay, something which not even the CEOs of FTSE companies get to do. As both director and shareholder you get to unilaterally decide how much should be paid in dividends, and then receive it (saving significant amounts of tax in the process).

If you wish to pursue the concept of making yourself redundant then you need to speak to your accountant and possibly also HMRC as the £30,000 tax free allowance may not apply to you. 

If your company has, as you say, a reasonable level of reserves then why not just grant yourself a dividend?

I'm the director.  It's only that title, and the management responsibilities that go with it, that makes me different to any other employee.

I can set my own salary at any level I want? I wish!

Why don't I pay myself a divi? Because I am a responsible employer and seeking to retain maximum reserves to use to retain my staff if I possibly can. I also feel I have a duty to them and thier families to try my best to support them during this uncertain time for all of us.

Another anonymous poster who thinks they klnow me and my business better than my 20 years experience has taught me

Of course you set your salary! You didn't poll your employees and ask them what they thought you were worth, did you? You, probably with advice from your accountant, determine your pay - a prerogative I highly doubt you grant your employees. You are both employee and employer and therefore in a unique position to set your earnings - analogous only to the self employed. 

Like Neil I don't claim to know you, or your business, but I have had more years of experience with the scrutiny which HMRC place on director's dealings than your time as an employer.

Oh, I'll award myself a pay rise of £1m per week then.

Like you say, you have no idea of my business, how it runs, nor my personal situation. Nor have you any clue as to how salaries are set within my business.
You try and keep HMRC away from your own door, and consider why you needed to have so much dealings with thim in the first place, whilst I also will put you on the list with Neil
#Don'tTellHimPike

AdeJ

So basically....as a director of a small company, no one has the answer if we can claim PAYE on which we are paid, or self employed which we are not.

So there is a good chance we could get nothing!!?

ComicGeek

Well, having listened to the briefing tonight it doesn't look like company directors will be treated as self employed. The reason I say this is that HMRC will be looking at tax returns to determine eligibility, and you would be ticking director on the 'What makes up your tax return' and not self employed.

We could ultimately do with delaying our corporation tax payment until next year, haven't heard any thing on this yet. We also just paid a large VAT bill a couple of weeks ago, so nothing to help us at the moment. 

Last week we were being offered business loans of up to £95k from Barclays - today they're reluctant to even offer us £25k which won't even get us to July.

amykirk1996

gov.uk/government/news/chancellor-gives-support-to-millions-of-self-employed-individuals
For small LTD companies, this is the key line:
"Those who pay themselves a salary and dividends through their own company are not covered by the scheme but will be covered for their salary by the Coronavirus Job Retention Scheme if they are operating PAYE schemes.

Luvoj

AdeJ said:

So basically....as a director of a small company, no one has the answer if we can claim PAYE on which we are paid, or self employed which we are not.

So there is a good chance we could get nothing!!?

I think, basically, I have answered it many times in this very thread already, despite the naysayers.