Director but sole employee

[LWB Electrical]

Hi,

Massive apologies if this had been asked already but I couldnt find it. I'm the director of my own company as went Ltd instead of self employed. Seems to be conflicting reports as to whether we can claim the 80% salary of employees back if you ate the director. Does anyone know where we stand?

 

[Andy78]

I'm definitely no expert on these matters, but as a director you take a wage so are also an employee ?

 

[davesparks]

If you are on the payroll of the company then yes you should be able to get the 80%

This will only be on wages/salary whatever its called and doesn't apply to dividends

 

[Zerax]

This will only be on wages/salary whatever its called and doesn't apply to dividends

And typically... incorporated traders will be taking a mix of salary & dividends for tax efficiencies etc.

 

[sparkless]

I'm Director and sole employee of my Ltd business.
I keep to minimum wage and award large dividends.

if I can get 80% of my wage then maybe I deserve a massive wage increase for three months or so

 

[dmax66]

I'm Director and sole employee of my Ltd business.
I keep to minimum wage and award large dividends.

if I can get 80% of my wage then maybe I deserve a massive wage increase for three months or so

Ditto. Bloody difficult times, I hoped we would not get to this state.

 

[TheSilverSpider]

I'm Director and sole employee of my Ltd business.
I keep to minimum wage and award large dividends.

if I can get 80% of my wage then maybe I deserve a massive wage increase for three months or so

I think its calculated on the past 12 weeks average....

But my account
writes to me today saying; (read below)

We have been getting a lot of questions about where people stand with their businesses and staff with the governments decisions to combat the coronavirus outbreak, so here is a summary of the main forms of aid currently, or soon to be, available:



Job Retention Scheme(furlough)

UK employers will be able to access support to continue to pay employees who would have been laid off due to temporary business closures. The government will fund 80% of their wage up to a cap of £2,500 per employee (It is hoped that these grants will be repaid by the end of April 2020). We advise that a 12 week average is taken for staff members with irregular working patterns. Details of payments made to staff need to be submitted through a new HMRC portal (this portal is not yet active).



We are advising that we continue to process employee payments at their usual rate(s) and that employers discuss with employees whether they pay the full 100% or just the reclaimable 80%. Please continue to notify us of your payroll hours etc.

You may have some staff working from home, some on SSP and some furloughed. We advise you keep a list of these employees, so you know who falls under which category and from what date. This includes directors which are on the payroll.



If your business requires short term cash flow support, you may qualify for a Coronavirus Business Interruption Loan (detailed below) or a Cash Grant (detailed below).



Deferred Tax

VAT payments will be deferred from 20th March 2020 until 30th June 2020 until the end of the 20/21 tax year. VAT returns must still be submitted as normal. If you have a Direct Debit in place you may need to cancel this to defer payment.

Also, anyone paying tax on account through self-assessment (primarily the self-employed) will have their July 31st 2020 payment deferred until 31st January 2021.



Employee Sick Pay

Up to 2 weeks of SSP paid by an employer to an employee due to absence due to COVID-19 or self-isolation can be reclaimed or refunded. You must employ fewer than 250 people. Employees do not need to supply a GP fit note, however we would advise that they apply for an isolation note from NHS 111 online (NHS 111 Online - About coronavirus (COVID-19) - https://111.nhs.uk/covid-19) and request that you make us aware that the SSP will need to go through as early as possible.



Business Rate Relief

Businesses in retail, hospitality or leisure may qualify for a business rates holiday. This will be automatically applied by your local authority.



Cash Grants

These are for retail, hospitality and leisure. Business with a rateable value under £15,000 will receive a grant of £10,000 and businesses with a rateable value between £15,001 and £51,000 will receive a grant of £25,000. Your local authority will contact you about this.



Support for businesses that pay little or no business rates

This is a grant for businesses that occupy property and receive small business rate relief or rural rate relief. It is a one-off grant of £10,000. Your local authority will contact you about this. You can also claim a £3,000 grant if you are under the rural business rate scheme.



Business Interruption Loan Scheme

The rules of the scheme are on the British Business Bank Website, but this would generally be taken out through your bank so speak to them.



Time To Pay Scheme

This has always been available to spread the cost of a tax bill but now more than ever is the time to make use of it. Please contact HMRC to arrange this on 0300 200 3835.



Insurance

See whether there is any sort of claim for loss of earnings that you can make on your business insurance, though in most instances pandemics are not covered unless specified.



IR35

This has now been put back until next April.



The link for more detail on all of the governments help is here, and I urge you to look at it:



COVID-19: support for businesses - https://www.gov.uk/government/publications/guidance-to-employers-and-businesses-about-covid-19/covid-19-support-for-businesses



The information changes daily so keep up to date with what could be of help to you and your business.

 

[sparkless]

no help at all really then.
Its irrelevant how much salary I claim my 80% of, as they will ask for it back by April 2020.

its a short term loan. As I pay myself Its not much use

 

[TheSilverSpider]

no help at all really then.
Its irrelevant how much salary I claim my 80% of, as they will ask for it back by April 2020.

its a short term loan. As I pay myself Its not much use

I questioned my account on this.
Their reply was;
Apologies if this wasn’t clear. It means that it is hoped that the government will have repaid employers 80% of the payments made to employees by the end of April 2020.

These payments are grants rather than loans so will not be repaid to HMRC at all.

 

[LWB Electrical]

I questioned my account on this.
Their reply was;
Apologies if this wasn’t clear. It means that it is hoped that the government will have repaid employers 80% of the payments made to employees by the end of April 2020.

These payments are grants rather than loans so will not be repaid to HMRC at all.

So does this include if we are employees of our own business?

 

[XTXDaz]

From Mr Moneysavingexpert:

The new coronavirus need-to-knows
1) SELF EMPLOYED/FREELANCE? Try to hold on - the support package should come this week. There's a real feeling of panic growing among the UK's self-employed. While there are some measures in place, they're simply not enough yet, so I've two important points...

a) I have it officially CONFIRMED the Govt is working on a further support package (some reports say it'll be as soon as Wed, but it'll almost certainly be by Fri). I don't know what it is, but suspect it'll be on a par with the 80% of your salary up to £2,500 for employees. So hold tight, and don't make any drastic decisions until that's announced.

For more, and for updates when we get news, see our self-employed coronavirus help including my video briefing.

b) Check the measures already in place to see if they can help, including deferring tax payments and claiming employment support allowance if you're sick. Plus crucially, don't dismiss universal credit (see below for why).

So basically hang tight, something should be coming soon.

 

[LWB Electrical]

From Mr Moneysavingexpert:

The new coronavirus need-to-knows
1) SELF EMPLOYED/FREELANCE? Try to hold on - the support package should come this week. There's a real feeling of panic growing among the UK's self-employed. While there are some measures in place, they're simply not enough yet, so I've two important points...

a) I have it officially CONFIRMED the Govt is working on a further support package (some reports say it'll be as soon as Wed, but it'll almost certainly be by Fri). I don't know what it is, but suspect it'll be on a par with the 80% of your salary up to £2,500 for employees. So hold tight, and don't make any drastic decisions until that's announced.

For more, and for updates when we get news, see our self-employed coronavirus help including my video briefing.

b) Check the measures already in place to see if they can help, including deferring tax payments and claiming employment support allowance if you're sick. Plus crucially, don't dismiss universal credit (see below for why).

So basically hang tight, something should be coming soon.

This has zero relevance to this topic mate. This is about Ltd company and being paid PAYE but as director

 

[XTXDaz]

This has zero relevance to this topic mate. This is about Ltd company and being paid PAYE but as director

We are self employed as far as I understand the situation, so it does apply to us.
If it helps, my accountant has said I should hang fire until the government announce the plans for the "self employed", I would like to think she knows what she is talking about.

 

[Paulgwat]

Hi,

Massive apologies if this had been asked already but I couldnt find it. I'm the director of my own company as went Ltd instead of self employed. Seems to be conflicting reports as to whether we can claim the 80% salary of employees back if you ate the director. Does anyone know where we stand?

I think there are a massive number of people in all sorts of businesses that are in this situation as it has been pushed by most accountants for the last 20 years or so.

According to my accountant I am classed as an employee and they are checking what the rules are but at best it will probably the 80% of the £720 a month they advised me to pay myself.

A mate of mine has been told by his accountant that as a director he cannot be furloughed and therefore he wont be able to claim anything - if that is the case then his apprentice will be better off than him!!

Also there appears to be a clause in the government backed loans paperwork that implies if your company has a decent credit rating you won't get the interest free 12 months either.....

I couldn't go self employed when I set up my company due to personal circumstances but it is starting to look like the low pay and dividends way of running a business isn't the best idea moving forward.

Paul

 

[dawsirn]

I've also asked my accountant about this, as me and the wife are directors of the company. Assumed we'd be taking the 80% of our PAYE earnings but accountant is unsure if directors can be Furloughed. So we're waiting to see if this can be clarified soon.

So I'm assuming if we don't qualify for this 80% employees figure then we'll be going down the self employed route of action?...what ever that'll be!