Our comment: Furlough scheme extension is some relief for owner directors

Rachel, our founder writes,

The extension to the furlough scheme, although widely trailed, has been modified following lobbying from the Trade Unions and businesses. However it is not just good news for employees in corporate business.

This looks like there will be at least some relief for owner-directors. One of the issues many of our clients have faced is that their directors – even when paid a salary- have still not been able to claim under the furlough scheme due to the very inflexible requirement that no work is done by the employee. For many directors who have lost business they have still been doing all they can to save their businesses and support their employees. This has meant that for many people have seen their work dry up, even by working 1 day a week they have been unable to gain any financial support.

It appears from today’s announcement that under the extended scheme they now will be allowed to claim for the hours they are not working. This will be some relief for the millions of small business owners who have felt forgotten.

The other good news for all businesses, andsmall employers in particular, is finally it looks like there will be some ability to share the pain (or pleasure…) of furlough with the ability to ‘part furlough’ team members – for example in a team of two rather than one person being off and the other working full time both team members will be able to work half time.

We’ll await the detailed guidance, and there are still gaps, for example for owner-directors who are paid partially via dividends, but it looks like an important step in the right direction.

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