- IPSE News
- Latest news
- Limited company director template furlough letter for the Coronavirus Job Retention Scheme
Limited company director template furlough letter for the Coronavirus Job Retention Scheme
- 13 Nov 2020
Since the beginning of the first national lockdown, IPSE has continued to call on the government to plug the gaps in the support schemes available for the self-employed. Around one in three have been excluded from the Self-Employed Income Support Scheme (SEISS). However, contractors operating through a limited company can access the furlough scheme, flexibly and once again at 80% of PAYE wages. Here we explain how it works - and how you can use our template furlough letter.
Job Retention Scheme extension explained
The Chancellor Rishi Sunak last week announced a return of the full Coronavirus Job Retention Scheme (JRS), commonly referred to as the ‘furlough’ scheme, until the end of March 2021. As with its previous iteration in March, salaried company directors can use the JRS to support the wage (PAYE) portion of their income. Dividends are not, however, considered when calculating your earnings. You will receive 80% of this figure, capped at £2,500 per month.
You will remain a director of your limited company during the furlough period, however you must adhere to all the conditions of the CJRS in this time. Similarly to how the previous system worked in the summer, you will be able to work flexibly, furloughing yourself for those days you are not working. This will make it much easier to operate your business throughout your furlough period.
Furloughed directors can continue to carry out particular duties to fulfil statutory obligations owed to the company. However, you should not do work of a kind you would otherwise carry out during your furloughed hours, for instance, generating commercial revenue or providing services to or on behalf of the company.
The scheme opened for claims on 11 November 2020.
How to access IPSE's template furlough letter
Just as we did for the first phase of the Job Retention Scheme, the team at IPSE has put together a useful letter which you can issue yourself, to formally make use of the extended furlough scheme.
The letter can be tweaked depending on your personal circumstances. This means you can adapt it to your needs depending on whether you are already on furlough and are looking to extend this, or whether you are looking to furlough yourself for the first time. The letter also sets out how you can make use of flexible furlough arrangements.
If you are not yet an IPSE member, then you can get in touch with us at [email protected] or by phone on 0208 897 9970 to discuss joining options today.
The template letter can be accessed by members in the resources section of our website here
Meet the author
IPSEIPSE is the leading association for contractors, consultants, interims, freelancers and the self-employed. We strive to bring our members the most comprehensive and useful range of information and services and all the latest news about what affects your business.
Ahead of the Spending Review, IPSE recaps our campaigning work for limited company directors and some new proposals on how government could support them during the covid-19 crisis.
- 25 Nov 2020
In the latest addition of the Freelance Confidence Index we may be seeing the settling of several trends. IPSE's Economic Policy Advisor takes us through the latest results.
- 25 Nov 2020
Late payment during the pandemic is harming freelancers’ financial prospects – but help may be on the way
IPSE's Alasdair Hutchison discusses our new research and how late payment is hitting freelancers' finances during coronavirus.
- 17 Nov 2020
IPSE members benefit from access to life assurance and a pension. Membership co-ordinator Patrick Carter explains the future benefits of an IPSE membership.
- 6 Nov 2020
In this third and final blog in our series, we take a look at what the last recession can tell us about what coronavirus means for freelancers.
- 6 Nov 2020