Directors Redundancy

Directors’ redundancy claims are very common during liquidation in the United Kingdom.

Many directors are entitled to redundancy payments when their company enters liquidation.

If you do meet the criteria, claims can be made from the National Insurance Fund via the Redundancy Payments Service (RPS), and are tax-free.

You can ask for a form from the liquidator or request one online.

All employees including directors can claim redundancy pay and other amounts they are owed following the liquidation of their company.

This includes sole directors who were both the only employee and also 100% shareholders and where put the company into liquidation themselves.

Eligible directors are entitled to get the following directors redundancy claims payouts:

• Under 22 years of age – Half a week’s pay for each full year of service
• Between 22 and 41 years of age – One week’s pay for each full year of service
• Over 41 years of age – One and a half week’s pay for each full year of service

Directors’ redundancy claims are tax-free.

The shareholder directors of limited companies cannot claim corporation tax relief for any payouts.