What can furloughed directors do?

[marcus_bond]

Claiming furlough and continuing to sell your products and services, generating sales income as usual is explicitly a no no.

Exactly...

As a Director, you can do any work required to supply information to fulfill a duty or obligation related to the business of running your company.

That exemption granted to directors does not mention any work required to supply goods or services, it only exempts the supply of information. Neither does it mention an exemption for any work that arises, other than through duty or obligation. Neither does it exempt reasons other than the 'administration' of your company.

 

[marcus_bond]

I guess a director could create an automated email as follows to all enquiries:

I am currently furloughed. As such I am forbidden from paying any invoices owed.

Ps would they also be forbidden from sorting their employee payroll if their accounts staff are on furlough?

As a Director, you are not forbidden from doing any work required to supply information to meet a duty or obligation related to the business of running your company. Of course you can do any work required to pay invoices... and wages...

 

[Newchodge]

Yes that's fine... there is no catch 22... Directors furloughed under CJRS rules can continue to do any work required to supply information, to fulfill any duty or obligation related to the running of their business. Because HMRC have been directed to disregard such work for the purposes of CRJS.

Income generation is not even mentioned.

The lengths you are going to, to twist the meaning of 'supply informaton' are ridiculous. Telling a bank to make a payment is no more supplying information than telling a delivery driver to deliver a customer's order.

 

[marcus_bond]

The lengths you are going to, to twist the meaning of 'supply informaton' are ridiculous. Telling a bank to make a payment is no more supplying information than telling a delivery driver to deliver a customer's order.

Under particular circumstances, that will fine too... it is under my circumstances...

My business is still running, and my employees have been directed by me, to continue processing customers orders, and shipping them. I'm just not involved in any of that. I'm sat at home 'shielded' under PHE's guidance, and yes I'm furloughed, but I'm still processing the payroll, and authorizing payments with the bank.

 

[valakot]

The lengths you are going to, to twist the meaning of 'supply informaton' are ridiculous. Telling a bank to make a payment is no more supplying information than telling a delivery driver to deliver a customer's order.

I tend to agree more with marcus_bond.
Based on the above discussion, it seems like certainly you can't do anything that would generate income but things like running payroll and paying employees (which in my case with 2 employee including me for example takes about 5 minutes with software) as well as claiming the grant (which is also activity) should not be excluded otherwise hmrc should have straight told a no no to furlough themselves for sole directors or at least set a clear rules when they can.
I just hope maybe HMRC updates the the guidance for directors with a bit more details following the IoD open letter to the government on 16 Apr 2020— "The IoD has called for urgent clarification on what activities directors can carry out while furloughed, following conflicting government advice."

 

[Karimbo]

You are required to keep records (for example the written agreement with the employee about furlough) for 5 years. HMRC will have 5 years to look at claims and there will be heavy penalties for those who have claimed fraudulently.

That's quite strong language and little bit on the side of scaremongering.

Directors are likely to be claiming very small amounts of money compared to employees. I think HMRC would be busy dealing with dodgy businesses that hire migrant workers who have since left the country where the employers are fraudulently claiming furlough money for. I'm sure there's all sorts of other "creative scams" involving this.

I don't think HMRC will be too fussed to go through directors activities to see if they were working when they shouldn't have been. Especially when they are so ambiguous with their guidance. For them to do enforcement action they'd need to have a watertight set of rules on what constitutes services to company and what constitutes statutory duties.

 

[Mr D]

That's quite strong language and little bit on the side of scaremongering.

Directors are likely to be claiming very small amounts of money compared to employees. I think HMRC would be busy dealing with dodgy businesses that hire migrant workers who have since left the country where the employers are fraudulently claiming furlough money for. I'm sure there's all sorts of other "creative scams" involving this.

I don't think HMRC will be too fussed to go through directors activities to see if they were working when they shouldn't have been. Especially when they are so ambiguous with their guidance. For them to do enforcement action they'd need to have a watertight set of rules on what constitutes services to company and what constitutes statutory duties.

For them to do enforcement action maybe.
How about to do a tax inspection? Not disruptive or costing more than a few minutes of directors time - and no need for anything to be wrong?

 

[Karimbo]

I don't follow, why would a tax inspection affect furlough grants?

 

[Mr D]

I don't follow, why would a tax inspection affect furlough grants?

Didn't suggest it would.

 

[Newchodge]

That's quite strong language and little bit on the side of scaremongering.

It is a statement if fact. If you find facts scarey, then you have a problem.

 

[Bob Morgan]

Is there a 'Special Hit Squad' of Furlough Enforcement Officers who operate like TV Licensing?

 

[Bob Morgan]

I don't follow, why would a tax inspection affect furlough grants?

The wonderful HMRC 'Connect' System!' - That gives HMG a £1.5 Billion 'Windfall' every year!

 

[Karimbo]

It is a statement if fact. If you find facts scarey, then you have a problem.

It's not a fact, it's an opinion. Your opinion. I never said it was scarey [scary], I said it was scaremongering (i.e. you are trying to scare).

Scaremongering doesn't help anyone, directors on this thread have voiced opinions saying they wont be furloughing themselves out of fear that HMRC might interpret the things differently to how they interpret it and have to face "heavy fines".

HMRC can't levy heavy fines when their guidelines are so ambiguous. They can only issue heavy fines when their guidelines are crystal clear and they've clearly defined the boundaries between what's statutory duty and what's service to business.

The most they can do is ask for the overpayment back.

E.g. to claim furlough money on behalf of your business could be interpreted as service to your business. To run the payroll on behalf of the business could be service to the business and not statutory duty according to some intrepretation. So these single director businesses should not be able to furlough themselves. Some might say, you can still do these things by outsourcing your work. That would mean you hand the keys of your business to your accountant and go completely AWOL, talking to the accountant while on furlough means you're carrying out service to the business.

 

[GFI]

What a load of jingely jangely bollocks.

Accountants - really essential and, like, proper super huge bores !!

Red wine influenced post - sorry : ))