Further Guidance for Companies on Furloughing Directors
Last week, we commented on Government guidance for companies on furloughing directors. We discussed how directors could continue with their duties, so long as they do no more than would be reasonably judged necessary for that purpose. The Government has now issued a Direction under the Coronavirus Act 2020 which provides further clarification.
This narrows the duties that directors can do whilst furloughed. Paragraph 6.6. states that the only duty a director can do whilst furloughed is: “Work undertaken by a director of a company to fulfil a duty or other obligation arising by or under an Act of Parliament relating to the filing of company accounts or provision of other information relating to the administration of the director’s company”. This means that a director must not do any other work beyond the scope of this if the company is to be entitled to make full use of the furloughing scheme.
This provided further clarification for directors and companies alike. It is useful as it clearly provides an outline of the type of work that HMRC will permit a furloughed director to undertake whilst not falling foul of the furloughing scheme.