Status of Company Directors
Hi all
Just asking this question on here as it may well be relevant to other sellers especially in terms of what help is available from the government during the current crisis.
I’m the sole director of a limited company which is currently suffering around a 95% drop in sales. We have 1 part time worker who is paid £200 per month so basically I am the business.
As a director would I be classed as an employee of that company (in which case the government may help out with 80% of wages) or would I be classed as self employed (in which case the government hasn’t yet specified what help is available)
My accountant is currently taking calls or returning emails.Any help appreciated.
0 replies
Seller_sFEUMUfeW5484
If you are on PAYE, then you should be covered. However the finer details are not know yet, waiting for HMRC to update their website.
Seller_lljyzgTxr5fgI
You are an employee of the company if your salary is subject to PAYE. I am exactly the same; the accountant does my payroll with HMRC but I am the sole employee, director, secretary and shareholder. A director can be self employed but I (and obviously you) are not. I am not seeking any financial assistance as business is still very good but I have received emails from our accountants on the subject.
Seller_lhG3Y690i4Qj9
I would think you will get 80% for the PAYE and 0% for the dividends.
Dividends are a share of the companies profits which are then paid to shareholders and there is no way the government will be subsidising company profits and therefore subsidising dividend payments especially as company directors use this method to avoid paying national insurance and lessen there tax liabilities.
There might be an argument that the personal tax you have paid in previous years on the dividends is self employed income but in reality it isn’t so i doubt that will hold water so personally I’m not and wouldn’t hold my breath on getting a penny support in relation to loss of dividend payments.
Seller_lljyzgTxr5fgI
There was only the tax of 5% on dividends over £5K originally but this has been reduced to £2K now. The 80% refers to salaries only, not dividends.
Seller_Rds42gzScDQFa
My son-in-law is director of his company. He has been told by HMRC he is not eligible for financial help.
Seller_vIpv9uvBH6CFY
My accountant is working from home, but he said nothing is clear yet.
He advised me to wait until the self employed advice comes out tomorrow.
He said it’s 50/50 but he’s honestly leaning towards directors not qualifying. However, he also said the self employment help would probably be similar to the 80% wage scheme, except it might even be means tested for your total income, not just your PAYE wages.
He basically told me to hold off until the self employment scheme gets announced, because directors might qualify for that if we’re lucky, but it’s also possible we get nothing.
