The Government has clarified some further details on the job retention scheme.
The cap of £2,500 relates to gross salary only – the government will also reimburse the associated employer pension contributions and employer NICs in addition to the £2,500. This is a welcome clarification as it will make it more straightforward to calculate the qualifying payments, basically 80% of salary or £2,500 – it is not necessary to deduct employer pension contributions or employer NICs from the £2,500 limit.
Director shareholders may claim the 80% reimbursement of salary that is subject to PAYE – this may be nominal for many owner managers who take small salary and large dividends, but an improvement on nothing at all and more than the Universal Credit payment would be.
In the context of directors, they may carry out their duties as an office holder, such as tending to company accounts/payroll etc., provided that they are not carrying out employment duties, such as selling to customers, for example.
For further details of the scheme, click here.