I’ll start honestly, the furlough rules for directors versus what the government will pay for the self-employed isn’t great.
Basically you can carry on trading if you’re self-employed and claim the grant. But you can’t claim any furlough money for yourself if you’re working in the business. Although you are allowed to carry out statutory duties as a director (submitting accounts etc).
Furloughing but self-employed?
I won’t steal credit for this idea, I heard it from a customer and Martin Lewis via one of his videos. Which also means I won’t accept liability either 😉
This won’t work for everyone, but if you’re employed as a company director and furloughed, and can do some work, could you do it on a self-employed basis? That way you can earn some money and claim the 80% from the government.
If you do decide to operate as a sole trader for the next few months, you need to look at the following –
- Bank account – make sure any earnings go via your personal bank or a new business one – not your company one. You can set up one quickly via one of the online banks (I’ll be getting a partner account soon!)
- Insurances – make sure you’re insured!
- Taxes – make sure you let us know! We’ll need to adjust your salary later in the year.
- Paperwork – Use your existing invoice templates and change your company name to your personal one. Keep all of your expenses like you normally would.
Work you could do whilst furloughed
Like I said, the idea above won’t work for everyone. But now is a good time to start gearing up for the future. And I think this one will.
Whilst you can’t do any work in the business. If you’re, say, building marketing material (website content, help guides, leaflets etc) and purely getting ready for when the lockdown finishes, no one’s going to know 😉
There’s a great book called They Ask You Answer which is well worth reading if you’re not sure where to start on the marketing material. And I think everyone of the businesses we look after can be doing something to help themselves get out of the starting blocks with a flyer by starting to be proactive now.
If you need further help, let us know as we have a number of customers who are helping businesses at this time on their marketing activities.
You can of course still liaise with us to ensure your company keeps up to date and accounts are submitted.