07 Apr 2020

Guidance for directors using Coronavirus jobs scheme

Guidance for directors using Coronavirus jobs scheme

HMRC has published eagerly awaited guidance with regard to the Coronavirus Job Retention Scheme (CJRS) and the position of company directors.

Directors who are paid a salary through PAYE do qualify for the CJRS and so can be furloughed provided:-

  • This is a formal decision of the Company, i.e. approved by a resolution of the board of directors;
  • The decision is noted in the records of the Company, i.e. this decision is minuted; and
  • The position is communicated in writing to the director.

A director, like any other employee who has been furloughed, cannot continue to work as would be expected in normal circumstances, i.e. they cannot be involved in generating revenue or providing services to or on behalf of the company.

HMRC have clarified however that a Director is entitled to discharge their statutory duties provided that they “do no more than would reasonably be judged necessary for that purpose”. 

This could include, for example, attending a Board meeting, ensuring statutory records are kept up to date and attending to statutory filings.

Personal service companies

The CJRS is open to directors of personal service companies (PSC) where a salary is paid to that director, which will be welcomed by many individuals who utilise PSCs to provide their services.

In some cases, directors who are also shareholders of a company receive remuneration by way of a dividend and it should be noted that the CJRS is limited to salary paid through PAYE only and so will not cover this income.

Companies will need to be careful to adhere to these rules or else risk being ineligible for grants being sought for directors.

Help for businesses 

For more information, please contact Karen Harvie (Empoyment) or Ritchie Whyte (Corporate).

Please correct the errors below before submitting your request:

Get in touch

Our dedicated client contact team prefer to receive enquiries through our contact form. We'll endeavour to get back to you within 24 hours or during the course of the next working day.

Tick this box if you wish to receive news and offers from Aberdein Considine. By doing, you indicate your consent to receiving targeted email marketing messages from us. On each occasion that we contact you in the future, you will be given the option to opt-out from receiving such messages. You may also email marketing@acandco.com at any time to opt-out.

The personal information that you provide to us in this form will only ever be used by Aberdein Considine (as the Data Controller) for the following specifically defined purposes:

  • email you content that you have requested from us
  • with your consent, occasionally email you with targeted information regarding our service offerings
  • continually honour any opt-out request you submit in the future
  • comply with any of our legal and/or regulatory obligations