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HMRC internal manual

Employment Income Manual

The benefits code: the effect of absence through illness on the status of a full time working director

A full-time working director may be absent from duty or unable to attend full-time to his duties because of illness. When deciding whether he is a “full-time working director (EIM20202) do not regard him as ceasing to devote substantially the whole of his time to the service of the company until a reasonable period of absence has elapsed. The period of absence to be allowed should normally be the shortest of:

  • the period of the illness or
  • 12 months from the commencement of the illness or
  • the period during which he continues as a director and no action consistent with expecting him not to return to full-time duty is taken by the company, for example, by letting him cease as a full-time director and employing him on a part-time basis.

Do not automatically treat him as losing “full-time” status if he returns to full-time duty shortly after the expiration of the 12-month period mentioned above. Regard full-time status as continuing despite the short additional period of absence provided that if he had returned to full-time duty at the end of the 12-month period he would have qualified as a full-time working director:

  • throughout the tax year in which he returned to duty or
  • for at least half of that year.