Job Retention Scheme – Update for Company Directors

Further to our previous emails on the Government Coronavirus Job Retention Scheme and Support for Limited Company Directors and salaried partners of an LLP there has now been further guidance released in order to clarify the situation as regards the furloughing of company directors.

The Government has confirmed that:

  • If you are an office holder remunerated through PAYE then you can be furloughed
  • The furlough arrangements should be adopted formally as a decision of the company or LLP
  • The decision must be formally communicated to the individual director(s)
  • Where a company considers that it is in compliance with the statutory duties of the salaried directors the board can decide to furlough such directors
  • Furloughed directors may carry out duties required to fulfil their statutory duties
  • They must do no more than would be judged reasonably necessary to fulfil those duties
  • They should not do work of a kind they would carry out in normal circumstances to generate commercial revenue
  • This also applies to directors of personal service companies

Should you require further clarification on the above, or any other matter, please contact your Fairhurst partner