The CBI has recently held a webinar regarding help for businesses in relation to the emergency coronavirus pandemic.
During the webinar (at 26 minutes and 15 seconds), the spokesperson from the Treasury confirmed that being a director of a limited company does not disqualify a director from accessing the coronavirus job retention scheme even if you continue to fulfil your statutory obligations, e.g. submitting the confirmation statement, submitting the company’s accounts, etc.
This is in line with comments on the Government’s website which says that “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 (CJRS) if they are operating PAYE schemes.”
IPSE are currently working to get clarification but their current view or opinion is that limited company directors should qualify for the 80% Coronavirus Job Retention furlough for their PAYE salary (not dividends).
It is worth remembering a few points, i.e. as it currently stands the Government furlough grant will only last for the 4 month period (1 March – 30 June), the scheme will be up and running on 20 April 2020, and it applies to PAYE schemes that were registered with HMRC and used as at 19 March 2020.
In addition to the CJRS, there are a few other measures that the Government has introduced for limited company directors such as:
- Allowing businesses to defer their VAT payments due during the period 20/03/2020 – 30/06/2020 until 31 March 2021. It is worth noting that VAT returns still need to be submitted and that if a business wishes to take advantage of this deferment they will need to cancel with direct debit with HMRC VAT.
- The self assessment payment on account due by 31 July 2020 can now be deferred until 31 January 2021.
- If your limited company owes HMRC corporation tax which cannot be paid due to cash flow reasons, you can call HMRC’s dedicated helpline on 0800 0159 559 in order to setup a time to pay arrangement.
- From 13 March 2020 Statutory Sick Pay (SSP) can be claimed from day 1 for any employees that are self isolating or under household quarantine. This may not be claimable for directors without a contract of employment/written statement of particulars.
- There is a Bounce Bank Loan scheme available.
- And there are various other measures available to all members of the public, e.g. 3 month mortgage holiday, protection for tenants facing evictions for 3 months, universal credit, employment and support allowance, job seeker’s allowance, child benefit, etc. There is also a charity called Turn 2 Us that provides a website that should hopefully allow you to work out what benefits you are entitled to.
Unfortunately, the Government are not allowing limited company director-shareholders to claim 80% of their company’s net profits or extracted profits (i.e. dividends). This is in contrast to sole traders who may be able to receive a taxable grant from the self employed income support scheme. There is currently a petition to the UK Parliament regarding this unfairness which can be found here.
AR Tax Accountants
£59/month accountants for contractors, freelancers, consultants, interims and locums
The above information is just for guidance purposes only and is not a substitute for professional advice and consulting the legislation.