Redundancy Pay for company directors

 

 

 

Video Script

If your company is liquidated you may be able to claim director redundancy pay and other statutory entitlements. Eligibility criteria for a director redundancy claim include working under a contract of employment for two years, and taking a regular salary under PAYE.

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You must also have worked for a minimum of 16 hours per week in a role that is more than advisory, and be owed money by your company. This video explains the process for claiming redundancy pay as a company director, and the timescales involved.

Initially, you should discuss your circumstances with the liquidator and obtain Form RP1. Claims for director redundancy are made through the Redundancy Payments Service, with payments being taken from the National Insurance Fund.

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This video also discusses the different types of statutory redundancy payments you might be eligible to receive. Payments can include arrears of wages and holiday pay, as well as unpaid pension contributions and pay in lieu of notice.

There is a six-month deadline to make a claim for redundancy from the date of liquidation, although this can sometimes be extended to 12 months. The calculation for redundancy pay incorporates your age, length of continuous service, and final salary, and payments are typically made within six weeks of a claim.

Redundancy pay can be used for a variety of purposes - to fund a Creditors’ Voluntary Liquidation, for example, which helps you meet your obligations as a company director. You could also use it to pay off some of the company’s debts.

Alternatively, a redundancy payout can offer vital support for your own finances given that your business has closed down.