Welcomed Clarification for Directors and Furlough

Posted on 6th April 2020 by Streets

Image to represent Welcomed Clarification for Directors and Furlough

Since the Government announced the Coronavirus Job Retention Scheme (CJRS), it has been unclear what the position is for Directors who are also an employee on the payroll of their Company.

It is clear that one of the conditions that must be met for an employee to be furloughed is that they must not work for the company after they have been furloughed.

This has naturally caused some debate for Directors who have both statutory and fiduciary duties they would need to continue to comply with.

The CJRS pages on the Government website did not previously refer to Directors, only the Self Employment pages alluded to Directors and how dividend remuneration would not be included.

However, on the 4th April the Government guidance on the CJRS pages of their website has now been updated in respect of a number of areas, including the position for Directors.


The updated guidance specifically states the following:

Company Directors

As office holders, salaried company directors are eligible to be furloughed and receive support through this scheme. Company directors owe duties to their company which are set out in the Companies Act 2006. Where a company (acting through its board of directors) considers that it is in compliance with the statutory duties of one or more of its individual salaried directors, the board can decide that such directors should be furloughed. Where one or more individual directors’ furlough is so decided by the board, this should be formally adopted as a decision of the company, noted in the company records and communicated in writing to the director(s) concerned.

Where furloughed directors need to carry out particular duties to fulfil the statutory obligations they owe to their company, they may do so provided they do no more than would reasonably be judged necessary for that purpose, for instance, they should not do work of a kind they would carry out in normal circumstances to generate commercial revenue or provides services to or on behalf of their company.

This also applies to salaried individuals who are directors of their own personal service company (PSC).

This helps bring clarity as to the duties Directors can continue to undertake if they are furloughed and the procedures they need to follow. 

In addition to Directors, the guidance has also been updated in respect of a number of other areas, which should help to answer questions that businesses and employees have had since the CJRS was announced. These include:

  • Eligible individuals who are not employees
  • Office Holders
  • Salaried Members of Limited Liability Partnerships (LLPs)
  • Agency Workers (including those employed by umbrella companies)
  • Limb (b) workers
  • Benefits in Kind and Salary Sacrifice Schemes


No Advice

The content produced and presented by Streets is for general guidance and informational purposes only. It should not be construed as legal, tax, investment, financial or other advice. Furthermore, it should not be considered a recommendation or an offer to sell, or a solicitation of any offer to buy any securities or other form of financial asset. The information provided by Streets is of a general nature and is not specific for any individual or entity. Appropriate and tailored advice or independent research should be obtained before making any such decisions. Streets does not accept any liability for any loss or damage which is incurred from you acting or not acting as a result of obtaining Streets' visual or audible content.


The content used by Streets has been obtained from or is based on sources that we believe to be accurate and reliable. Although reasonable care has been taken in gathering the necessary information, we cannot guarantee the accuracy or completeness of any information we publish and we accept no liability for any errors or omissions in material. You should always seek specific advice prior to making any investment, legal or tax decisions.

Expert insight and news straight
to your inbox

Related Articles

Welcome to our new merged practice Streets Andrew Wright in Wakefield!

We are delighted to announce the establishment of Streets Andrew Wright Chartered Accountants. The announcement follows the merger of the Wakefield practice, Andrew Wright & Co with ourselves.When asked about the merger, Sally Wright, Managing Director, said: “Fellow Director Richard Farndale and I are delighted and excited about the ...

Golf Day Secures Hole in One for Air Ambulance

We hosted our 11th annual charity golf day earlier this month raising a record amount of more than £7,500 for the Air Ambulance. The total amount fundraised will be divided between our three regional charities; East Anglian Air Ambulance, Lincolnshire and Nottinghamshire Air Ambulance and Yorkshire Air Ambulance.The winning ...

Ordering documents from Companies House

Companies House offers interested parties the ability to order certified copies of certificates and documents held on the Companies House register. You can order: a company certificate with certified facts; or a certified copy of a document held

You might also be interested in...