BiZHUB member Andy Tree, Top Branch Partners, has summed up the various clarifications needed for the self-employed, company directors and employers as follows:
The question that every small limited company director/shareholder is asking me at the moment is whether they are entitled to claim the 80% salary as a 'furloughed worker' of their own company. This is still not clear and HMRC operatives cannot advise beyond what is already in public domain. My view is we will only know the answer to this, once HMRC make the application portal live and I can review the line of questioning.
HMRC currently say on the that: "HMRC will set out more details shortly." I hope this means a few days, as larger organisations with many staff need to urgently know where they stand too.
Other questions outstanding that I await answers for are:
- On basis that only salary (not dividends) are included, can a director start paying themselves a larger salary from 1st March onwards and then claim 80% moving forward?
- What if a director has forgotten to run a monthly payroll and needs to submit backdated, to cover legitimate provable drawings? Same could apply to their employee(s)?
- Can the 80% claim be utilised for a director that uses the annual PAYE scheme and declares salary once a year? If so, how? This happens to be March (month 12) where annual salaries are usually declared against drawings. Could we increase to a higher sum, then move to monthly payroll and claim the 80%
- If HMRC increase the support for the self-employed (e.g. https://www.ftadviser.com/your-industry/2020/03/25/covid-19-update-for-self-employed-confirmed-for-tomorrow/) then would limited company directors be able to claim through this method and claim against salary and dividends, from self-assessment tax returns filed?
I am assuming that a family member including spouse with an established salary and employed role in your company could be classed as a 'furloughed worker' (on basis you cannot afford to pay them for what they do at this time) and the 80% claimed. However, will need to review the final guidance when published.
In addition to government and HMRC guidance above, you could take a look at anything your local authority may be offering i.e. district/borough/unitary council?.
The best link for up-to-date government guidance remains: