Ltd Company 2 x Directors - Both Furloughed?

Creamegg79

Hi, I've been trawling through posts to try to find an answer, but can't see it.
Myself & partner run a Ltd Company, we are both directors and both pay ourselves a small salary via Paye (the rest in dividends), our accountant has said only one of us can be furloughed.  I just wanted to know if it was possible that we can both be furloughed.  We have no work at all, all future bookings all cancelled etc.  We are owed for a number of unpaid invoices, I can set up an automatic invoice chaser on the accounting software we use, so we don't have to do anything.  But not sure if this is possible, would be grateful if anyone had any info.  thanks 

patchman

Your accountant is wrong, you can both furlough for 80% of your PAYE salary.

sliphi

Creamegg79 said:

Hi, I've been trawling through posts to try to find an answer, but can't see it.
Myself & partner run a Ltd Company, we are both directors and both pay ourselves a small salary via Paye (the rest in dividends), our accountant has said only one of us can be furloughed.  I just wanted to know if it was possible that we can both be furloughed.  We have no work at all, all future bookings all cancelled etc.  We are owed for a number of unpaid invoices, I can set up an automatic invoice chaser on the accounting software we use, so we don't have to do anything.  But not sure if this is possible, would be grateful if anyone had any info.  thanks 

I would urge you to get a new accountant; one you can trust.

When a sole director of a limited company can be furloughed, why would any, even half decent, accountant think it's not possible for a limited company with 2 directors not to have both directors furloughed?

silvercar

You can both be furloughed as long as you do no work for the company other than fulfill legal obligations as a director.

neilmcl

sliphi said:

Creamegg79 said:

Hi, I've been trawling through posts to try to find an answer, but can't see it.
Myself & partner run a Ltd Company, we are both directors and both pay ourselves a small salary via Paye (the rest in dividends), our accountant has said only one of us can be furloughed.  I just wanted to know if it was possible that we can both be furloughed.  We have no work at all, all future bookings all cancelled etc.  We are owed for a number of unpaid invoices, I can set up an automatic invoice chaser on the accounting software we use, so we don't have to do anything.  But not sure if this is possible, would be grateful if anyone had any info.  thanks 

I would urge you to get a new accountant; one you can trust.

When a sole director of a limited company can be furloughed, why would any, even half decent, accountant think it's not possible for a limited company with 2 directors not to have both directors furloughed?

That's harsh. Accountants up and down the country are only going on the basic information they've been given so far regarding what the government is offering. It's was only very recently that the Government have conceded that a director can be furloughed and still carry out their necessary tasks of office holder whilst still abiding by the no work rule but until the scheme is up and running nobody knows for sure.

They're playing catch up like the rest of us.

Hermann

From the guidance, as said change accountants....

Company Directors

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).

Jeremy535897

Hermann said:

From the guidance, as said change accountants....

Company Directors

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).

The question was asked of the accountant before this guidance was published today. The fact that it was necessary to issue the guidance indicates that the matter was not straightforward.

Hermann

Jeremy535897 said:

Hermann said:

From the guidance, as said change accountants....

Company Directors

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).

The question was asked of the accountant before this guidance was published today. The fact that it was necessary to issue the guidance indicates that the matter was not straightforward.

There was nothing prior to the updated guidance that indicated 2 directors being treated any differently to  sole director.

The acountant specifically stated that only one director could be furloughed yet there was nothing in official guidance to indicate this.

If the accountant felt there was uncertainty that is what they should have said, ie. It is not clear we await further guidance.

The entire situation regarding Directors was awaiting clarification so I'd consider any competent accountant to have said just that.

Of course people are free to make their own judgments on the competency of professionals they employ, it's times like these that incompetence tends to shine brighter.

sliphi

neilmcl said:

sliphi said:

Creamegg79 said:

Hi, I've been trawling through posts to try to find an answer, but can't see it.
Myself & partner run a Ltd Company, we are both directors and both pay ourselves a small salary via Paye (the rest in dividends), our accountant has said only one of us can be furloughed.  I just wanted to know if it was possible that we can both be furloughed.  We have no work at all, all future bookings all cancelled etc.  We are owed for a number of unpaid invoices, I can set up an automatic invoice chaser on the accounting software we use, so we don't have to do anything.  But not sure if this is possible, would be grateful if anyone had any info.  thanks 

I would urge you to get a new accountant; one you can trust.

When a sole director of a limited company can be furloughed, why would any, even half decent, accountant think it's not possible for a limited company with 2 directors not to have both directors furloughed?

That's harsh. ...

The truth sometimes is

neilmcl

Hermann said:

From the guidance, as said change accountants....

Company Directors

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).

That guidance has only just been updated as of today.

Hermann

neilmcl said:

Hermann said:

From the guidance, as said change accountants....

Company Directors

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).

That guidance has only just been updated as of today.

The consideration is whether the advice was entirely competent under the earlier guidance.