cheap accountants - Covid-19

We have received a large number of questions about what Government support is available to Directors of their own limited company. There was some initial confusion about whether or not a company director can be furloughed but this has finally been clarified by HMRC.

The great news is that a Company Director can be furloughed and in turn qualify for a Government grant. The specific guidance relating to this can be found on HMRC’s website here: https://www.gov.uk/guidance/claim-for-wage-costs-through-the-coronavirus-job-retention-scheme

We are delighted to see the section that has been added for Company Directors which stipulates the following:

1. Salaried Company Directors can be furloughed and receive grant support via the Government support scheme.

2. A furloughed company director may carry out the statutory duties they are obliged to perform on behalf of their company.

3. A furloughed company director cannot carry out any work that would be performed in normal circumstances to generate commercial revenue.

4. A furloughed company director must not provide any services to or on behalf of their company.

How much can be claimed?

You will be able to apply for a Government grant amounting to 80% of the usual monthly wage costs, up to £2,500 a month for a period of three months.

The start date of the scheme is 01 March 2020 so the three months here are March, April and May.

A director paying a monthly salary of £715 a month could be looking at a Government grant as follows:

£715 x 80% = £572 x 3 months = £1,716

Do I need to consider anything else to qualify for this grant?

To be eligible for the grant scheme the following must also be met:

i) Created and started a company PAYE scheme (i.e. be registered as an employer for PAYE) on or before 28 February 2020.

ii) Enrolled for PAYE online – some clients may need to activate this as it seems that this may be used to submit the furloughed employee data.

iii) Have a UK bank account.

We do hope everyone remains safe and well throughout this epidemic and we are always here for you.