Limited Company Director Template Furlough Letter for the CJRS
- 7 May 2020
As IPSE has highlighted in recent weeks, limited company directors have been excluded from the government’s main packages of Coronavirus economic support, most notably the Self-Employment Income Support Scheme (SEISS).
While we continue to call for more support for this group, directors may be able to keep some money coming in via the government’s Job Retention Scheme (JRS).
To help provide some support, IPSE has developed a template letter that can be used by directors as part of their claim to access the JRS. The letter, developed in consultation with solicitors, can be used to fulfil the government requirement to communicate the decision to furlough in writing to the director concerned. The letter should be used in conjunction with the other requirements set out in the guidance.
As the government’s guidance makes clear, salaried company directors are eligible to be furloughed and receive support through the JRS for the wage (PAYE) portion of their income. Dividends are not, however, considered when calculating your earnings.
We recognise the imperfections of directors furloughing themselves under the scheme. As well as the exclusion of dividends, which means many contractors will not receive income support appropriate to their previous earnings, the decision to furlough as a director will mean you are not allowed to undertake income generating activity for the business, and a Real Time Information (RTI) submission must have been made to HMRC in respect of your pay by 19 March 2020 to be eligible.
This is why we are continuing to push for more targeted support. However, this template letter may be a useful resource for contractors who feel they have few options to generate income at the present time, with many clients choosing not to renew contracts or cancelling them altogether amidst the current uncertainty.
The template letter can be accessed by members in the resources section of our website here
You can also read the full government guidance here
Download the template
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