Where do directors stand with the Coronavirus Job Retention Scheme?

The option to furlough employees under the Coronavirus Job Retention Scheme (CJRS) will by now be very familiar to company directors.

What was not particularly clear when the scheme was first announced, however, was what the entitlement may look like for company directors, especially those running businesses with only themselves on the payroll, or themselves plus one or two other employees.


Can a company director furlough themselves?


In short, yes. However, this is not as straightforward as it might seem.


One issue concerns what you as a director can or cannot do if you are forced to furlough yourself during the next few months. It is a requirement of the CJRS for furloughed employees that an employee does not provide services to or for the business. This is obviously potentially problematic for you as company director. The other issue concerns how much you might receive under the scheme.


The government has now updated its guidance to provide a little more clarity. The basics of the scheme have not changed:



As long as you have had PAYE salary payments through the company PAYE prior to 28 February 2020, company directors are eligible to be furloughed. The company must have:

  • Set up and run payroll prior to 28 February 2020
  • Enrolled for PAYE online – this can take up to 10 days, if it is not already set up
  • Have a UK bank account


This applies to any business with a UK payroll.



The decision to furlough must be formally adopted as a decision by the company. This must be noted in the company records and communicated in writing to the director.

What you can and can’t do


You may undertake your statutory duties as director of the company whilst on furlough, however, you must not provide commercial services for the company, or participate in activities that generate revenue for the company.


In the government’s own words, directors can undertake their duties to ‘fulfil the statutory obligations they owe to their company…’, but ‘…should not do work of a kind they would carry out in normal circumstances to generate commercial revenue or provide services to or on behalf of their company’.


This applies to company directors, salaried members of LLP’s, individuals who are directors of their own PSCs, Agency workers (including those employed by umbrella companies) and Limb (b) workers.

What will you receive? 


HMRC will cover up to 80% of your PAYE salary.


Unfortunately, if you have been only receiving a small salary through PAYE, it is still only the PAYE salary that will be considered in your entitlement calculation (so no dividend payments etc).

What other options do I have? 


It may be the case that you qualify for the COVID-19 Self- Employed Income Support Scheme, if you meet certain criteria.


You must have been filing Self Assessment tax returns for the tax year 2018/19, have traded in 2019/2020 and be continuing (or intending to continue) to trade in the current tax year.


Critically, your self employed profits must be less than £50,000 and these profits must account for more than half of your total taxable income.


Neither of the above provide much comfort and I am not sure that my business is going to survive this. 


Whilst we are not here to give you business advice, we do recommend that you take some.


Our colleagues at Business Rescue Expert are specialists in this area and can offer a free, informal, initial consultation.


What we would say is that if the worst is to happen, and the company has to go into liquidation or another formal insolvency process, and you have been receiving some salary through PAYE, there are options for you.


You will be entitled to redundancy payments, claimable from the National Insurance Fund, if the company enters formal insolvency.


If you would like further information about this, please get in touch today. We can run through this side of things with you and give you a good idea of what this option would look like for you financially.