Furlough News for Directors of Ltd Companies

Many members who work through their own limited companies have run up against an issue with furloughing themselves for the PAYE portion of their income, because their accountants have set up an annual scheme rather than a monthly one.

HMRC have clarified their advice to say that these people can furlough themselves as long as their accountant submitted an RTI before 19th March 2020 for income in the 19-20 tax year.

Members who do qualify should speak to their accountant, as it appears it may be necessary to call in to HMRC & over-ride the system manually. We’ll share more information about that when we have it.

The HMRC info is here (scroll down to to the heading ‘Company directors with an annual pay period’): https://www.gov.uk/guidance/claim-for-wage-costs-through-the-coronavirus-job-retention-scheme

The relevant text says:

Those paid annually are eligible to claim, as long as they meet the relevant conditions. This includes being notified to HMRC on an RTI submission on or before 19 March 2020, which relates to a payment of earnings in the 19/20 tax year. The requirement for there to be payment of earnings in the 19/20 tax year applies for any employee being claimed for under the scheme, irrespective of how frequently they are paid (e.g. weekly, fortnightly or monthly). This will be relevant for those on an annual pay period if the last payment notified to RTI was before 5 April 2019 and no further payments were notified until after 19 March 2020.

An employer can make their claim in anticipation of an imminent payroll run, at the point they run their payroll or after they have run their payroll.



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