£ 1000 employer compensation

Jaco70

dunstonh said:

and a third is my wife who only draws £ 100 pw wages.

Is there a reason why you are not paying your wife to the primary threshold (or secondary threshold as you have employees)?

Although the detail is yet to be published fully I'd doubt that it would apply to sole operated ltd companies and personally I don't think it should. It's an attempt to limit the amount of redundancies and you;re hardly in that position as a ltd co. director. 

If the directors are on the monthly payroll then there is no reason why they should not be.   Annual payroll directors will almost certainly lose out again.

The £ 100 is just a bit of pin money, as she also gets dividends from the company and she has another part time job as a teaching assistant. £ 100 was plucked out of thin air tbh, to cover the few hours she works doing accounting software and payroll. She's a shareholder but not a director.

epm-84

Jaco70 said:

sliphi said:

Jaco70 said:

jimkelly said:

Daveinlincoln said:

So leading on from what the replies state here....am I also eligible? (hope you don't mind me jumping on your thread Jaco70)
I'm a limited company director, its just me in the company and I pay myself £700 a month, i'm getting £560 a month furlough pay at the moment.

Could I also get the £1000 in January?

Yes as long as you are still paying yourself more then £520 per month between Nov - Jan.

Going back to the OP, as he seems to under the impression that he'll "only" get £1000.  If the 8 people furloughed are all still on the payroll for the 3 months up to the end of January (and they are all being paid a minimum of £520 per month for those 3 months), then the company will received 8 x £1000.

Whether they are a director or their wages are subsequently increased* (i.e. as your wife could be) is irrelevant.

* - unless the wording yet to be released restricts this in some way.

Yeah that's great. Potentially £ 7,000 as one employee left subsequently, but still a huge bonus for a small business. 

Yes, a little bonus for you come February, equivilent to a couple of weeks payroll bill, assuming you:
a) manage to generate the £85,000 between now and then to pay all your staff (plus whatever else you need to actually run your buisiness)
b) you increase your wife's pay by 30% (probably best not to let the other staff know of her pay rise for doing teh same job, else they will probably want to know where their's is, meaning your wage cost will increase to over £200k per year!)
c) All your current staff elect to remain with you (less the one who already left you once)
d) You don't have to let anyone go (less the one who already left you once, but if you now are forced to let that person go having only recently re-employed them, the morale of the other employees (less possibly your wife) will probably drop to rock bottom.

If you don't achieve all that, then the value of the bonus will be less.

* and assuming no devil is hidden in the detail when it is released later this month.

It's a scheme designed to now encourage employers to retain staff and so keep them off the dole queue, where presumably most would already be as they were generating no income for you at all very recently for 1-2 months.

Hope all goes well for your business that you will manage to get the bonus.

The one guy who left resented having to come off furlough, but my accountant was clear that if there's work to return to, and people wish to stay home, SSP is the correct route. 

Of course you'll be well aware the government weren't strict about the criteria for who can and can't be furloughed - as long as the reason an employee couldn't work related to COVID-19 and they would be off work for at least 3 weeks - they left it to employers to make the decision.  Some employers decided that employees who live with a partner who has to shield for medical reasons can be furloughed even if they had work for the employee to do, others did not.  The difference between furlough and SSP isn't a financial cost to the business (as the government funds both) but it may be a decision that could affect whether your employees think you're a good employer or not.

Jeremy535897

Jaco70 said:

dunstonh said:

and a third is my wife who only draws £ 100 pw wages.

Is there a reason why you are not paying your wife to the primary threshold (or secondary threshold as you have employees)?

Although the detail is yet to be published fully I'd doubt that it would apply to sole operated ltd companies and personally I don't think it should. It's an attempt to limit the amount of redundancies and you;re hardly in that position as a ltd co. director. 

If the directors are on the monthly payroll then there is no reason why they should not be.   Annual payroll directors will almost certainly lose out again.

The £ 100 is just a bit of pin money, as she also gets dividends from the company and she has another part time job as a teaching assistant. £ 100 was plucked out of thin air tbh, to cover the few hours she works doing accounting software and payroll. She's a shareholder but not a director.

Remember that to get corporation tax relief on her wages, they must be wholly and exclusively for the purposes of the trade. If you overpay her, they could challenge a deduction (unlikely, but it has happened).

Jaco70

Jeremy535897 said:

Jaco70 said:

dunstonh said:

and a third is my wife who only draws £ 100 pw wages.

Is there a reason why you are not paying your wife to the primary threshold (or secondary threshold as you have employees)?

Although the detail is yet to be published fully I'd doubt that it would apply to sole operated ltd companies and personally I don't think it should. It's an attempt to limit the amount of redundancies and you;re hardly in that position as a ltd co. director. 

If the directors are on the monthly payroll then there is no reason why they should not be.   Annual payroll directors will almost certainly lose out again.

The £ 100 is just a bit of pin money, as she also gets dividends from the company and she has another part time job as a teaching assistant. £ 100 was plucked out of thin air tbh, to cover the few hours she works doing accounting software and payroll. She's a shareholder but not a director.

Remember that to get corporation tax relief on her wages, they must be wholly and exclusively for the purposes of the trade. If you overpay her, they could challenge a deduction (unlikely, but it has happened).

Yeah, I have the most risk averse accountant ever, and he mentions this every year. But honestly, £ 100 pw seems so small that I don't worry about it causing problems. I don't employ any other office staff, so realistically she could work two or three days and it still be viable.

Jeremy535897

Jaco70 said:

Jeremy535897 said:

Jaco70 said:

dunstonh said:

and a third is my wife who only draws £ 100 pw wages.

Is there a reason why you are not paying your wife to the primary threshold (or secondary threshold as you have employees)?

Although the detail is yet to be published fully I'd doubt that it would apply to sole operated ltd companies and personally I don't think it should. It's an attempt to limit the amount of redundancies and you;re hardly in that position as a ltd co. director. 

If the directors are on the monthly payroll then there is no reason why they should not be.   Annual payroll directors will almost certainly lose out again.

The £ 100 is just a bit of pin money, as she also gets dividends from the company and she has another part time job as a teaching assistant. £ 100 was plucked out of thin air tbh, to cover the few hours she works doing accounting software and payroll. She's a shareholder but not a director.

Remember that to get corporation tax relief on her wages, they must be wholly and exclusively for the purposes of the trade. If you overpay her, they could challenge a deduction (unlikely, but it has happened).

Yeah, I have the most risk averse accountant ever, and he mentions this every year. But honestly, £ 100 pw seems so small that I don't worry about it causing problems. I don't employ any other office staff, so realistically she could work two or three days and it still be viable.

You could easily solve the problem by making her company secretary.

Jaco70

epm-84 said:

Jaco70 said:

sliphi said:

Jaco70 said:

jimkelly said:

Daveinlincoln said:

So leading on from what the replies state here....am I also eligible? (hope you don't mind me jumping on your thread Jaco70)
I'm a limited company director, its just me in the company and I pay myself £700 a month, i'm getting £560 a month furlough pay at the moment.

Could I also get the £1000 in January?

Yes as long as you are still paying yourself more then £520 per month between Nov - Jan.

Going back to the OP, as he seems to under the impression that he'll "only" get £1000.  If the 8 people furloughed are all still on the payroll for the 3 months up to the end of January (and they are all being paid a minimum of £520 per month for those 3 months), then the company will received 8 x £1000.

Whether they are a director or their wages are subsequently increased* (i.e. as your wife could be) is irrelevant.

* - unless the wording yet to be released restricts this in some way.

Yeah that's great. Potentially £ 7,000 as one employee left subsequently, but still a huge bonus for a small business. 

Yes, a little bonus for you come February, equivilent to a couple of weeks payroll bill, assuming you:
a) manage to generate the £85,000 between now and then to pay all your staff (plus whatever else you need to actually run your buisiness)
b) you increase your wife's pay by 30% (probably best not to let the other staff know of her pay rise for doing teh same job, else they will probably want to know where their's is, meaning your wage cost will increase to over £200k per year!)
c) All your current staff elect to remain with you (less the one who already left you once)
d) You don't have to let anyone go (less the one who already left you once, but if you now are forced to let that person go having only recently re-employed them, the morale of the other employees (less possibly your wife) will probably drop to rock bottom.

If you don't achieve all that, then the value of the bonus will be less.

* and assuming no devil is hidden in the detail when it is released later this month.

It's a scheme designed to now encourage employers to retain staff and so keep them off the dole queue, where presumably most would already be as they were generating no income for you at all very recently for 1-2 months.

Hope all goes well for your business that you will manage to get the bonus.

The one guy who left resented having to come off furlough, but my accountant was clear that if there's work to return to, and people wish to stay home, SSP is the correct route. 

Of course you'll be well aware the government weren't strict about the criteria for who can and can't be furloughed - as long as the reason an employee couldn't work related to COVID-19 and they would be off work for at least 3 weeks - they left it to employers to make the decision.  Some employers decided that employees who live with a partner who has to shield for medical reasons can be furloughed even if they had work for the employee to do, others did not.  The difference between furlough and SSP isn't a financial cost to the business (as the government funds both) but it may be a decision that could affect whether your employees think you're a good employer or not.

I understand what you're saying, but as most of my guys had returned to work happily (as our work is outdoor and social distancing easy to achieve) it was causing resentment, so I was being seen as a bad boss because I was allowing one employee (with no health issues, family shielding etc) to stay furloughed, not  because I wanted him to come back. In fact I didn't want him to return, as I correctly feared he would cause trouble, but I took my accountants advice that he should have been on SSP. I still believe this to be correct.

neilmcl

jimkelly said:

neilmcl said:

Daveinlincoln said:

So leading on from what the replies state here....am I also eligible? (hope you don't mind me jumping on your thread Jaco70)
I'm a limited company director, its just me in the company and I pay myself £700 a month, i'm getting £560 a month furlough pay at the moment.

Could I also get the £1000 in January?

Although the detail is yet to be published fully I'd doubt that it would apply to sole operated ltd companies and personally I don't think it should. It's an attempt to limit the amount of redundancies and you;re hardly in that position as a ltd co. director. 

The Chancellor has already said it will apply to all who were furloughed and in the HMRC employers email sent out last night, it said this:

Dear customer,

Today the Chancellor announced the introduction of the Job Retention Bonus.

This is a one-off payment of £1,000 to employers that have used the Coronavirus Job Retention Scheme (CJRS) for each furloughed employee who remains continuously employed until 31‌‌‌ ‌January 2021. The bonus will provide additional support to retain employees.

To be eligible, employees will need to:

• earn at least £520 per month (above the Lower Earnings Limit) on average for November, December and January
• have been furloughed by you at any point and legitimately claimed for under the Coronavirus Job Retention Scheme
• have been continuously employed by you up until at least 31‌‌‌ ‌January 2021.

Employers will be able to claim the bonus from February 2021 once accurate RTI data to 31‌‌‌ ‌January has been received. More information about this scheme will be available by 31‌‌‌ ‌July and full guidance will be published in the Autumn.

In any case, as seen previously on these boards with a [perceived] lack of support for small Ltd directors, I find it hard to justify how they (in your view) should be "excluded" - for want of a better word - whilst larger firms are somehow seen as more important.  You do know that Ltd directors actually pay tax as well?

Many of the excluded directors didn't bother with furlough in order to try to keep their companies afloat.  The CJRS Bonus is another kick in the teeth for them, because having not done so (furloughing themselves), they have inadvertently excluded themselves from this extra support.

And there's one glaring point your missing, the majority of sole operator ltd co. directors are not by definition employees and they can't be made redundant which is why the payment of this bonus would be largely erroneous. Also, yes I'm aware directors pay tax as I'm one myself but not sure of the point you're trying to make, as well as bringing up the whole "excluded" argument as this isn't relevant to this discussion. 

jimkelly

Of course it’s relevant.

The whole Ltd directors excluded debate came about because owner directors are classed as employees, not self employed.  Therefore, they’re not eligible for SEISS.

You’re now suggesting that they’re “not by definition employees”, so which is it?  Either they are employed or they’re not.  Either they are self employed or they’re not.  You can’t have it both ways.

neilmcl

jimkelly said:

Of course it’s relevant.

The whole Ltd directors excluded debate came about because owner directors are classed as employees, not self employed.  Therefore, they’re not eligible for SEISS.

You’re now suggesting that they’re “not by definition employees”, so which is it?  Either they are employed or they’re not.  Either they are self employed or they’re not.  You can’t have it both ways.

No, they are not classed as employees at all, they are a special case entirely. They are office holders, not employees, but were allowed to take advantage of the Furlough scheme.

Grumpy_chap

Ltd co directors are employees and happen to also be office holders