Furlough, latest guidance

[Newchodge]

What If I have PAYE debt? I canceled all VAT and PAYE payment when we realise reduced (zero) enquirie and heard about VAT deferral.

PAYE should be paid as normal unless you have agreed an alternative with HMRC. Ring them now.,

 

[Mister G]

Hi, I took over an existing cafe business on 9th March 2020, we trade for 7 days amidst the early rumblings of the virus becoming a pandemic, we barely broke even and now as we retained the existing staff we would like to look after them but we have no revenue coming in and obviously still got overheads to pay. 1st payroll was done on 16th March so we don’t qualify for the job retention scheme as the payroll wasn’t in place as of the 28th feb, although the staff have worked at the cafe for the previous owner for years. Would this also mean we’re not entitled to any grants, directors payment, loans etc.... (the cafe doesn’t pay any rates as the rent is very low) any advise would be very welcomed. thanks for reading

 

[Mr D]

Hi, I took over an existing cafe business on 9th March 2020, we trade for 7 days amidst the early rumblings of the virus becoming a pandemic, we barely broke even and now as we retained the existing staff we would like to look after them but we have no revenue coming in and obviously still got overheads to pay. 1st payroll was done on 16th March so we don’t qualify for the job retention scheme as the payroll wasn’t in place as of the 28th feb, although the staff have worked at the cafe for the previous owner for years. Would this also mean we’re not entitled to any grants, directors payment, loans etc.... (the cafe doesn’t pay any rates as the rent is very low) any advise would be very welcomed. thanks for reading

Is the cafe registered for business rates - and set at zero?

Just be aware that redundancy could be expensive.

Really bad luck to take on a business at this time.

 

[Alan]

1st payroll was done on 16th March so we don’t qualify for the job retention scheme as the payroll wasn’t in place as of the 28th feb, although the staff have worked at the cafe for the previous owner for years

Did you keep the same employer PAYE reference ( no idea if that is actually possible - so just asking )

 

[adam thompson1981]

There is some good advise Q&A on Sage Help centre, this looks helpful (bad news for some some if correct) Copy/Paste

Can employed directors receive furlough payments?
Yes. You can furlough directors if the business still has at least one active director for the company to trade. You can't furlough the only director in a business.

My accountant has told me today I won't qualify as a sole director cannot be furloughed. Apparently they got this info from HMRC.

I think I will contact HMRC myself, seems a ridiculous situation where a sole director is left out of both the self employed and employed schemes.

 

[Mr D]

My accountant has told me today I won't qualify as a sole director cannot be furloughed. Apparently they got this info from HMRC.

I think I will contact HMRC myself, seems a ridiculous situation where a sole director is left out of both the self employed and employed schemes.

There appear to be a number of accountants saying that.
There are a couple of threads mentioning it. Or hopefully one of the experts will be along later today.


Self employed scheme would not apply, you are not self employed as a director.

 

[qqcs]

My accountant has told me today I won't qualify as a sole director cannot be furloughed. Apparently they got this info from HMRC.

I think I will contact HMRC myself, seems a ridiculous situation where a sole director is left out of both the self employed and employed schemes.

“If you’re a director of your own company and paid through PAYE you may be able to get support using the Job Retention Scheme.”

 

[Newchodge]

A sole director c

My accountant has told me today I won't qualify as a sole director cannot be furloughed. Apparently they got this info from HMRC.

I think I will contact HMRC myself, seems a ridiculous situation where a sole director is left out of both the self employed and employed schemes.

annot be furloughed if they carry out any work for the business othr than statutory duties. Outsourcing payroll solves that, or furlough for 3 weeks, then time to work, then firlough for 3 weeks. Even if the accountant got their information from the HMRC helpline, it doesn't make it accurate. The self employed support scheme states that directors can be furloughed.

 

[Bob Morgan]

I REALLY HATE THIS WORD "FURLOUGH!" Given that this is a UNITED KINGDOM Business Forum, I wonder how many were aware of the expression prior to Coronavirus?

 

[adam thompson1981]

A sole director c

annot be furloughed if they carry out any work for the business othr than statutory duties. Outsourcing payroll solves that, or furlough for 3 weeks, then time to work, then firlough for 3 weeks. Even if the accountant got their information from the HMRC helpline, it doesn't make it accurate. The self employed support scheme states that directors can be furloughed.

My accountant deals with my payroll.

I guess I will have to wait a while until full details are released. So much conflicting advice about on the Internet and seems HMRC don't even know just yet.

 

[k3n7]

I have one employee that started with us on 2nd March,

Is there any support available for her?

I can't keep paying her salary if there is no support, but also feel bad to let her go as she just started and needs the income

 

[Newchodge]

I REALLY HATE THIS WORD "FURLOUGH!" Given that this is a UNITED KINGDOM Business Forum, I wonder how many were aware of the expression prior to Coronavirus?

I was aware of it, but only ever heard it used im a US context. However a word was defintielt needed to describe the situation to avoid the confusion that already exists about lay off.

 

[Newchodge]

My accountant deals with my payroll.

I guess I will have to wait a while until full details are released. So much conflicting advice about on the Internet and seems HMRC don't even know just yet.

Your accountant carries out your instructions, not the other way around. Have you asked the accountant on what grounds you cannot do this?

 

[Newchodge]

I have one employee that started with us on 2nd March,

Is there any support available for her?

I can't keep paying her salary if there is no support, but also feel bad to let her go as she just started and needs the income

sorry, state benefits only.

 

[Mr D]

I REALLY HATE THIS WORD "FURLOUGH!" Given that this is a UNITED KINGDOM Business Forum, I wonder how many were aware of the expression prior to Coronavirus?

Millions.

We have these places called schools. While set up to babysit children they also provide a common educational background for the population.

 

[Mr D]

I have one employee that started with us on 2nd March,

Is there any support available for her?

I can't keep paying her salary if there is no support, but also feel bad to let her go as she just started and needs the income

Universal credit or you by the sound of it. And the benefit could take considerable time to get paid, they are swamped with new claims.

Suddenly the existence of food banks in such numbers becomes a strategic benefit to the country.
Not ideal but nothing about a pandemic is.

 

[Bushman]

Do we need to put anything in writing to our employees to tell them they are being Furloughed with any clauses to cover ourselves. If so are there any template letters around that we could use?

 

[ecommerce84]

Hi, I took over an existing cafe business on 9th March 2020, we trade for 7 days amidst the early rumblings of the virus becoming a pandemic, we barely broke even and now as we retained the existing staff we would like to look after them but we have no revenue coming in and obviously still got overheads to pay. 1st payroll was done on 16th March so we don’t qualify for the job retention scheme as the payroll wasn’t in place as of the 28th feb, although the staff have worked at the cafe for the previous owner for years. Would this also mean we’re not entitled to any grants, directors payment, loans etc.... (the cafe doesn’t pay any rates as the rent is very low) any advise would be very welcomed. thanks for reading

In what way did you ‘take over’ the cafe - did you buy the shares in the existing Ltd company or take it on with a new one?

If you kept the existing company, they’ll be on payroll for the 28th feb even if you are using a different service to run your payroll

 

[KrisDylan213]

A sole director c

annot be furloughed if they carry out any work for the business othr than statutory duties. Outsourcing payroll solves that, or furlough for 3 weeks, then time to work, then firlough for 3 weeks. Even if the accountant got their information from the HMRC helpline, it doesn't make it accurate. The self employed support scheme states that directors can be furloughed.

I am struggling to agree with you here that you can furlough a sole director or all directors of a company. Whilst I agree with you that they can fulfil their statutory duties but unless they physically shut their doors, turn their emails, phones, don't deal with the post etc how are they not still working for or on the business. It is near on impossible for a sole director to not perform any form of working duty for their company, they will most likely still have:
1. debts to chase
2. creditors to pay or defer
3. General admin to catch up on
4. Business development - which is key in a time like this to stay in touch with referral partners, find new ones.
5. business planning and continuity, I would be very concerned any business just closing the doors and not looking to plan or get work in/arranged for when we come out of this horrible situation?

 

[Newchodge]

I am struggling to agree with you here that you can furlough a sole director or all directors of a company. Whilst I agree with you that they can fulfil their statutory duties but unless they physically shut their doors, turn their emails, phones, don't deal with the post etc how are they not still working for or on the business. It is near on impossible for a sole director to not perform any form of working duty for their company, they will most likely still have:
1. debts to chase
2. creditors to pay or defer
3. General admin to catch up on
4. Business development - which is key in a time like this to stay in touch with referral partners, find new ones.
5. business planning and continuity, I would be very concerned any business just closing the doors and not looking to plan or get work in/arranged for when we come out of this horrible situation?

I agree they cannot do any of that if on furlough.

 

[KrisDylan213]

I agree they cannot do any of that if on furlough.

So you see my point that it is near on impossible to furlough a sole director or all of the directors in a multiple director company

This is why as accountants (even though we are not HR advisors) we are saying that you can not furlough to our sole director owned companies or to those with more than one director wanting to furlough everyone.

 

[Mr D]

I am struggling to agree with you here that you can furlough a sole director or all directors of a company. Whilst I agree with you that they can fulfil their statutory duties but unless they physically shut their doors, turn their emails, phones, don't deal with the post etc how are they not still working for or on the business. It is near on impossible for a sole director to not perform any form of working duty for their company, they will most likely still have:
1. debts to chase
2. creditors to pay or defer
3. General admin to catch up on
4. Business development - which is key in a time like this to stay in touch with referral partners, find new ones.
5. business planning and continuity, I would be very concerned any business just closing the doors and not looking to plan or get work in/arranged for when we come out of this horrible situation?

So they do not deal with all that and get some money.
Or deal with that and avoid government help.

The thinking parts can be done regardless - can do business planning in the bath.

 

[KrisDylan213]

So they do not deal with all that and get some money.
Or deal with that and avoid government help.

The thinking parts can be done regardless - can do business planning in the bath.

So they would physically receive from the government £833 if they are lucky enough to be paying themselves £12,500 a year or £575 if paying themselves the NI Limit and perhaps don't chase debts that prob exceed this, or liaise with creditors to help ease their burden and perhaps in worst case scenario's avoid them looking to take further actions on the money they are owed. Contact the banks to access the CBILS Scheme.

Take the phone call that might just be quite a significant job for afterwards.

Think I know which one represents potentially the biggest loss.

 

[Newchodge]

So you see my point that it is near on impossible to furlough a sole director or all of the directors in a multiple director company

This is why as accountants (even though we are not HR advisors) we are saying that you can not furlough to our sole director owned companies or to those with more than one director wanting to furlough everyone.

You can furlough every director. Advising that you cannot is wrong. A small business that is in close down may well have a director who does no work, or who furloughs for 3 weeks then works for 1 day then furloughs for 3 weeks.

 

[UKSBD]

This is one of the reasons why I asked in a previous post about one person taking over the work of another (or others)

I would assume in most cases at least 1 person in a business will have to do something, if that one person is allowed to fulfil the roles of all the others, it makes sense that the director does it and furloughs all the others.

 

[Newchodge]

So they get £833 if they are lucky enough to be paying themselves £12,500 a year or £575 if paying the NI Limit and perhaps don't chase debts that prob exceed this, or liaise with creditors to help ease their burden and perhaps in worst case scenario's avoid them looking to take further actions on the money they are owed. Contact the banks to access the CBILS Scheme.

Take the phone call that might just be quite a significant job for afterwards.

Think I know which one represents potentially the biggest loss.

The NI limit is 719. (pedants are us).

 

[KrisDylan213]

You can furlough every director. Advising that you cannot is wrong. A small business that is in close down may well have a director who does no work, or who furloughs for 3 weeks then works for 1 day then furloughs for 3 weeks.

I am not saying you can't but it is almost completely unrealistic to expect a business owner to not carry out any type of work within those three weeks. i.e a debtor phones up wanting to pay your not going to take the call hey? or a quote/enquiry is emailed in your going wait three weeks to reply

 

[Newchodge]

Do we need to put anything in writing to our employees to tell them they are being Furloughed with any clauses to cover ourselves. If so are there any template letters around that we could use?

You need to issue letters. I am unaware of any free templates.

 

[KrisDylan213]

The NI limit is 719. (pedants are us).

you get 80% 719*0.8= 575

 

[Newchodge]

I am not saying you can't but it is almost completely unrealistic to expect a business owner to not carry out any type of work within those three weeks. i.e a debtor phones up wanting to pay your not going to take the call hey? or a quote/enquiry is emailed in your going wait three weeks to reply

But the advice being given out by some accountants is straight 'you cannot do this'. That is wrong advice . 'You may not be able to do this because you would be unable to xyz if you do, unless you do it on a 3 week rotation basis' is acurate advice.

 

[Newchodge]

you get 80% 719*0.8= 575
stick to hr

You said "paying themselves £12,500 a year or £575 if paying the NI Limit". Please leave the lies to those who have not committed themselves in writing.

 

[UKSBD]

You said "paying themselves £12,500 a year or £575 if paying the NI Limit". Please leave the lies to those who have not committed themselves in writing.

I read it as "or £575 if paying the NI Limit"

 

[Mr D]

So they get £833 if they are lucky enough to be paying themselves £12,500 a year or £575 if paying the NI Limit and perhaps don't chase debts that prob exceed this, or liaise with creditors to help ease their burden and perhaps in worst case scenario's avoid them looking to take further actions on the money they are owed. Contact the banks to access the CBILS Scheme.

Take the phone call that might just be quite a significant job for afterwards.

Think I know which one represents potentially the biggest loss.

Yes its down to the director whether working or not working is the best option.
But the option exists.

You can choose for your business, you don't get to choose for all.

 

[KrisDylan213]

But the advice being given out by some accountants is straight 'you cannot do this'. That is wrong advice . 'You may not be able to do this because you would be unable to xyz if you do, unless you do it on a 3 week rotation basis' is acurate advice.

Whilst that is legally correct and don't argue this nor disagree with you, but as said in real business terms this is not going to happen as for most they will still be doing something for their businesses etc. There a few exceptions where you rule can be applied but not many. And because of this it is why they are being told they can not furlough, accountants should be making the reasons why not clear to their clients.

 

[Newchodge]

I read it as "or £575 if paying the NI Limit"

So did I. £512 per month is the point at which you accrue pension credits etc. £719 per month is the most you can pay without paying NI. £12,500 per year is usually the most you can pay without paying income tax, although you will pay NI.

 

[Mr D]

I am not saying you can't but it is almost completely unrealistic to expect a business owner to not carry out any type of work within those three weeks. i.e a debtor phones up wanting to pay your not going to take the call hey? or a quote/enquiry is emailed in your going wait three weeks to reply

Now either they take 3 weeks / more than 3 weeks off or else they work.
One gets them some reimbursement to the company of wages, one doesn't.

There will be directors with no debtors to chase, with no work likely for a while. They may see one option as viable while the other isn't relevant.

Telling people they don't have any option is going to be bad for the director.

 

[peterainbow]

anyone know what happens to grievances whilst on furlough

 

[KrisDylan213]

I read it as "or £575 if paying the NI Limit"

Have amended to make it read better.

 

[UKSBD]

So did I. £512 per month is the point at which you accrue pension credits etc. £719 per month is the most you can pay without paying NI. £12,500 per year is usually the most you can pay without paying income tax, although you will pay NI.

Yes, but the £575 he posted is 80% of £719, you just read his post wrong.

 

[Newchodge]

Yes, but the £575 he posted is 80% of £719, you just read his post wrong.

You're right, I did. Commas would have made it easier.