If the company can’t make the above payments where due, it’ll need to follow the insolvency route and will need to be liquidated in order for payments to be made (if only the redundancy payment is due, you can follow the non-insolvency route).
Payments are made from the National Insurance Fund which is managed by the Redundancy Payments Service. They are subject to the following statutory limits:
- The maximum weekly salary rate that will be paid for the tax year ending 5/4/2021 is £538.
- Arrears of Pay: a maximum of 8 weeks will be considered
- Holiday Pay: a maximum of 6 weeks will be considered
- Notice Pay: a maximum of 12 weeks will be considered
- Redundancy Pay: a maximum of 30 weeks will be considered
Are directors entitled to redundancy payments?
In short, yes. As long as you can demonstrate your status as an employee of the company, as well as director.
Have you worked for the business on a regular basis? For more than two years continuously? Have you been entitled to remuneration from the company, with at least part of your salary going through the company PAYE?
Then you will be entitled to redundancy pay if the company is closing for financial reasons. Regardless of how long you have worked for the company, you will also be entitled to (at least) a paid statutory notice period, together with any unpaid salary the company owes you, and/ or outstanding holiday days.
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Looking to close your business? Click below to find out more about non-liquidation claims
If your business is closing and has settled all its financial obligations with the exception of your redundancy entitlement, it’s possible that you can claim to the Redundancy Payments Service for Redundancy Pay only. Follow the links below to find out more.