Support for employees during Covid-19

I do hope that everyone is staying safe and healthy during these stressful times.

Will the government support for furloughed employees paid to companies need to be repaid to the government, in the future?

No not generally. The idea is the government subsidises your pay instead of the employer.

Bare in mind though that if your a Ltd company director on a salary there is some debate at the moment between accountants as to whether you can furlough yourself. So you may not be entitled to claim.

However there may be the option of the self employed route if this is true.

The issue is no detail has been published yet so we’re finding it hard to advise anyone at the moment.

No, this is a grant not a loan. There is no reason to suggest it doesn’t apply to directors as long as they are paid a salary through PAYE and were on the payroll at 29 Feb 2020. It will be backdated to the first day of furloughing but no earlier than 1st March and will run for 3 months at present.
Dividends are specifically excluded and directors are not self-employed and so cannot claim through the self-employer support package.
All the details on the Job Retention Scheme are here

When I wrote the reply. It was still unknown as to whether omb directors would be included. Now we’ve had clarification so my reply would now be incorrect.

For a one man band Ltd Co working from home, the support is largely useless as it’s almost impossible not to do any work in the business if you furlough for say 2 months.
Even the act of furloughing itself is work, so if you can’t do that until end April, back-dating it must be unavailable.
Then what if VAT returns need to be filed or if your year end falls in the period? Maybe a supplier needs paying? Even without orders, there is rarely a week goes by without a requirement to do something.

With regard to directors, apparently statutory duties may be carried out while furloughed, but no services or revenue-generating work. Keeping proper accounting records is part of your statutory duties, so within this I would include filing VAT returns and completing a year-end. These actions do not generate revenue so would be fine.

See here for a bit more detail on the subject

There are an awful lot of people in this situation who essentially view themselves as self-employed and work in the same way as they did (or would) as a sole trader. I am hoping that the government will recognise this and provide a little more support for them also. We can but wait and see - which is no help at present, I know.

I fully appreciate that it’s difficult to create a comprehensive scheme so quick but there are so many issues I see.
Having a rate able premises seems to open the door to a lot more support for example.

Closing isn’t an option for me unless I’m forced to because a portion of my sales go to key industries like Fire, Police, RNLI, Military…

But whilst some of us will have to plough on with reduced sales, lower profits, and tighten our belts, we’ll all have to work for the next few years to re-balance the UK’s books.

1 Like

Yes, a rateable premises definitely helps but an awful lot of people work from home these days so it doesn’t apply :frowning:
It is a really tough time and sadly I think despite the government’s financial support, I fear an awful lot of small businesses just won’t survive. Especially as a lot of the support is in the form of loans, which it will be nigh on impossible to pay back with a business struggling to get on its feet again.