Advice for Limited Company ContractorsIndustry News
Over the past few weeks we’ve been working hard to help our clients navigate the financial support available during the coronavirus lockdown. For many contractors who operate as sole directors of a limited company, there has been little state support as they are not entitled to the same job retention scheme as employees or self employed contractors who operate as sole traders.
MoneySavingExpert Martin Lewis has continued to advocate for workers and financial security throughout the lockdown, leading campaigns to make sure no one falls through the gaps. We are pleased to see Martin Lewis’ support for limited company contractors, this week Lewis has given new advice which we hope is useful to many contractors we work with.
NEW: Are you a small limited company director eg a one (wo)man band?
My new video briefing on helps, tips, and wriggle room if you're struggling financially due to Coronavirus difficulties.
(Now with subtitles)
Please share pic.twitter.com/DBbTjhYPGX— Martin Lewis (@MartinSLewis) April 8, 2020
In the video, Lewis explains that whilst dividends are covered by any government schemes, there is “wriggle room” for directors. Those who have PAYE earnings, are able to furlough themselves as an employee and claim up to 80% of their earnings (up to a maximum payout of £2,500 per month). It has to be noted that those on the furlough aren’t allowed to continue to work - however statutory duties as a company director, such as administrative tasks and preparing tax returns, are allowed. Lewis also explains that being on furlough doesn’t stop you from working freelance for somebody else - which may be helpful for contractors who are able to do so.